First Midwest Securities, Inc. (CRD #21786, Bloomington, Illinois) recently submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $75,000.
Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to establish and maintain a supervisory system and establish, maintain and enforce supervisory procedures reasonably designed to review the suitability of equity transactions to detect and prevent excessive trading.
The findings also stated that the firm did not utilize exception reports to assist in detecting patterns of unsuitable excessive trading. The firm’s clearing firms made exception reports available that identified turnover and commission-to-equity ratio in customer accounts. The firm did not begin using such reports until a later time. The findings also stated that to identify unsuitable excessive trading, the firm relied on the daily review of trade blotters as well as turnover ratio reports that were prepared manually and reviewed by the firm’s compliance staff on a semi-annual basis. The manually-prepared reports did not address cost-to-equity ratios in accounts.
This information which is publicly available on FINRA’s website has been provided by The White Law Group, LLC.
If you have questions about investments you made with First Midwest Securities, Inc., the securities attorneys of The White Law Group may be able to help. To speak with a securities attorney, please call the firm’s Chicago office at 312/238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
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