PNC Investments LLC fined by FINRA

Tuesday, April 15th, 2014

PNC Investments LLC (CRD# 129052, Pittsburgh, Pennsylvania) recently submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $90,000. The firm has paid restitution to all affected customers.

Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to apply an appropriate rollover or breakpoint discounts to eligible unit investment trust (UIT) purchases for customers. As a result, the firm overcharged customers a total of$52,040.12. The findings stated that the firm failed to adequately enforce its existing WSPs concerning rollover and breakpoint sales charge discounts so as to ensure discounts were properly applied to all eligible UIT purchases by customers.

This information which is publicly available on FINRA’s website has been provided by The White Law Group, LLC.

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.  For a free consultation with a securities attorney, please call the firm’s Chicago office at 312/238-9650.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

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Merriman Capital, Inc. fined by FINRA

Tuesday, April 15th, 2014

Merriman Capital, Inc. (CRD #18296, San Francisco, California) recently submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured, fined $120,000 and required to retain an independent consultant to conduct a comprehensive review of the adequacy of the firm’s WSPs.  The firm shall adopt and implement the independent consultant’s recommendations and shall provide FINRA with a written implementation report, certified by a firm officer, setting forth the details of the implementation.

Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to maintain WSPs reasonably designed to achieve compliance with applicable securities laws and regulations.  The findings stated that the firm’s WSPs listed specific legal rules and regulations to be complied with, but failed to describe the specific procedures to be followed by the firm, or the person responsible for carrying out many of its procedures to be followed by the firm.

The findings also stated that the firm’s supervisory procedures failed to address several lines of its business.  Among other deficiencies, the firm’s WSPs failed to address private placements even though selling such securities was a substantial portion of the firm’s business and it raised more than $16 million for its parent company through several private offerings.  The firm’s procedures also failed to designate an appropriate principal to supervise private placements of its own securities.

The findings also included that the firm revised its WSPs to address private placements but the revised procedures were still insufficient. In spite of FINRA notification that the new procedures appeared to be deficient, the firm continued to engage in private placements of its parent company’s securities while maintaining the inadequate supervisory procedures.  FINRA found that the firm raised approximately $10 million by selling shares of unrated preferred stock issued by its parent company but did not file the offering materials with FINRA. Prior to the effective date of FINRA Rule 5122, the firm had discussed potential terms with an investment adviser representative, but had not commenced its selling efforts. FINRA also found that the firm raised $3.1 million by selling shares of three-year promissory notes issued by its parent company that paid 10 percent interest. The term sheet disclosed to investors that intended uses of the proceeds from the placement included between $750,000 and $1,000,000 to be paid to settle litigation. The firm and its parent company did not make any other disclosures about the intended use of the proceeds. In addition, FINRA determined that the majority of the proceeds were intended for ordinary operating expenses, not to resolve litigation. The firm used a written investor presentation to solicit investors for the placement that failed to disclose information and contained false statements. Even though an earlier version of the presentation was reviewed and signed off of by a firm principal, a firm principal did not approve the final version prior to use and the firm did not maintain a separate file for the communication evidencing its approval.

This information which is publicly available on FINRA’s website has been provided by The White Law Group, LLC.

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.  For a free consultation with a securities attorney, please call the firm’s Chicago office at 312/238-9650.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

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Chase Investment Services Corp. fined by FINRA

Tuesday, April 15th, 2014

Chase Investment Services Corp. (CRD #25574, Chicago, Illinois) recently submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $825,000.

Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to deliver approximately 1,101,271 prospectuses to its customers for certain mutual fund and exchange-traded fund (ETF) transactions.

The findings stated that the firm satisfied its mutual fund and exchange-traded fund prospectus delivery obligation by contracting with a third-party service provider. Although the firm relied on the service provider to deliver its mutual fund and ETF prospectuses to customers, it remained the firm’s responsibility to review transactions and verify that a prospectus was properly delivered when required. The firm launched a fee-based, discretionary, unified managed account through which clients could hold, among other investments, mutual funds, ETFs and money market funds. Due to a configuration error in the automated systems the firm utilized for prospectus delivery, the firm directed its service provider to deliver prospectuses for mutual fund and ETF transactions to the investment adviser, a firm affiliate, instead of customers. As a result, the firm failed to deliver prospectuses to the unified managed account customers for whose accounts mutual funds and ETFs had been purchased, and those customers were not provided with important disclosure information about the products. The findings also stated that the firm failed to establish and maintain a supervisory system reasonably designed to achieve compliance with federal rules regarding prospectus delivery requirements. The firm did not have a formal procedure for reviewing the service provider’s prospectus delivery reports for the unified managed accounts and did not assign anyone to review the service provider’s prospectus delivery reports or the service provider’s system for these accounts. The firm had access to the service provider’s system, which identified to whom a prospectus had been delivered, but failed to follow up and review the information to ensure that the service provider was sending prospectuses to customers as required. In fact, the firm did not provide the firm groups that monitored prospectus delivery compliance access to the service provider system. Thus, the firm did not detect that it failed to send prospectuses to its customers for mutual fund and ETF transactions.

This information which is publicly available on FINRA’s website has been provided by The White Law Group, LLC.

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.  For a free consultation with a securities attorney, please call the firm’s Chicago office at 312/238-9650.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

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Silver Oak Securities, Incorporated fined by FINRA

Tuesday, April 15th, 2014

Silver Oak Securities, Incorporated (CRD #46947, Jackson, Tennessee) recently submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $10,000.

Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it permitted a registered representative to recommend and sell non-traditional ETFs to some of the firm’s customers. The findings stated that the firm did not investigate the characteristics and risk factors of such products before allowing its representative to recommend them to customers or provide its representatives any training or other guidance specific to whether and when non-traditional ETFs might be appropriate for their customers. The firm did not implement any procedures for supervising the firm’s purchase and trading of non-traditional ETFs. Instead, it relied on supervisory systems that were already in place. The findings also stated that as a result of the firm’s failure to implement a supervisory system tailored to non-traditional ETFs, the firm did not monitor transactions involving non-traditional ETFs, which would include tracking the volume of customers’ holdings in non-traditional ETFs, as well as tracking the length of time open positions were maintained in non-traditional ETFs, and any resulting unrealized losses. The firm did not impose any limitations on trading or holding non-traditional ETFs.

This information which is publicly available on FINRA’s website has been provided by The White Law Group, LLC.

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.  For a free consultation with a securities attorney, please call the firm’s Chicago office at 312/238-9650.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

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Safra Securities LLC fined by FINRA

Tuesday, April 15th, 2014

Safra Securities LLC (CRD #47873, New York, New York) recently submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured, fined $25,000 and ordered to pay $22,576, plus interest, in restitution to the customers.

Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it charged mark-ups or mark-downs on certain purchases and sales of fixed income securities that were not fair and reasonable, taking into consideration the factors set forth in NASD Interpretive Material (IM) 2440-1(b) and that exceeded 5 percent. The findings stated that the firm charged $22,576 in excessive mark-ups or mark-downs in a total of 16 transactions. The firm’s WSPs required that the designated supervisory principal review all principal and riskless principal transactions daily to determine whether mark-ups charged complied with NASD Rule 2440 and IM-2440-1 and that mark-ups or mark-downs in excess of 5 percent required approval by a designated supervising principal prior to such charges being made. The firm failed to implement its supervisory system for the review of mark-ups or mark-downs charged as it failed to review the foregoing riskless principal transactions to determine the appropriateness of the mark-up or mark-down in light of the factors delineated in its own procedures and in NASD Rule 2440 and IM-2440-1, and failed to require a designated supervising principal’s approval of mark-ups or markdowns in excess of 5 percent prior to such charges being made.

This information which is publicly available on FINRA’s website has been provided by The White Law Group, LLC.

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. To speak with a securities attorney, please call the firm’s Chicago office at 312/238-9650.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

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