The Financial Industry Regulatory Authority (FINRA) has recently fined three broker-dealers- J.P. Turner & Co. of Atlanta, Georgia, Park Financial Group, Inc. or Maitland, Florida, and Legent Clearing, LLC of Omaha, Nebraska- for failing to implement reasonable anti-money laundering compliance programs, including the failure to detect, investigate and report instances of potentially suspicious transactions in low-priced stocks (“penny stocks”).
For each firms’ failure to follow securities rules, J.P. Turner was fined $525,000, Park Financial was fined $400,000 and Legent Clearing was fined $350,000. In addition, two individuals- Park Financial’s former CEO and anti-money laundering compliance officer Gordon Charles Cantley and J.P. Turner equity trader John McFarland- were barred permanently from the securities industry. David Farber, a Park Financial equity trader, was fined $25,000 and suspended in all capacities for 30 days. S. Cheryl Bauman, J.P. Turner’s former anti-money laundering compliance officer, was fined $30,000 and suspended from acting as a principal in a securities firm for 18 months, while Robert Meyer, a former J.P. Turner branch manager, was fined $5,000 and suspended as a principal for one month.
The Bank Secrecy Act and FINRA rules require all broker-dealers to design and implement programs to detect and report suspicious transactions at, by or through the firm. According to FINRA, in each case, the firms failed to establish and/or implement reasonable procedures to detect and report suspicious trading in low-priced securities (“penny stocks”). Certain trading in penny stocks creates a risk that these securities can be used by unscrupulous issuers of the stock, stock promoters and others affiliated with the issuers for money laundering or to commit securities fraud or market manipulation. Many of the transactions in these cases presented sufficient red flags that the firms should have had reason to suspect that the customers may have been engaged in unregistered distributions, market manipulation or securities fraud.
If you have questions about investments you made with J.P. Turner, Park Financial or Legent Clearing, or if you believe that you have been the victim of a securities fraud, The White Law Group may be able to help. To speak to a securities attorney, please call our Chicago office at 312-238-9650 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.