Purshe Kaplan Sterling Investments, Inc. (CRD #35747, Albany, New York) recently submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $100,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to establish, maintain and/or enforce a supervisory system and written procedures reasonably designed to achieve compliance with the rules and regulations applicable to the supervision and suitability of variable annuity transactions by, among other things, failing to review such transactions on a timely basis, supplying adequate guidance to supervisors to effectively review the suitability of variable annuity exchanges and the subaccount and rider recommendations associated with variable annuity sales, and implementing reasonable means of identifying suspicious patterns involving variable annuity exchanges, such as exception reports. The findings stated that the firm further failed to establish, maintain and enforce written supervisory control policies and procedures reasonably designed to review and monitor transmittal of customer funds. The findings also stated that with respect to certain customer check requests, the firm failed to provide a means or method of customer confirmation, notification or follow-up that could be documented, and the procedures did not address whether a registered representative was allowed to deliver the check to a client. The findings also included that since the firm did not require a customer letter of authorization or copies of driver’s licenses for check requests below $25,000, a registered representative could request the issuance of such checks without having to provide the firm with any documentation indicating customer approval of the request.
FINRA found that as a result of the firm’s deficient control policies and procedures concerning the transmittal of customer funds, a former firm registered representative was able to misappropriate $41,300 from a customer by submitting separate check request forms for that customer’s account for amounts under $25,000. FINRA also found that the firm was unable to determine from its records the delivery dates or check recipients. In addition, FINRA determined that the customer’s signature was forged on the checks, which were cashed at the same bank location where the representative maintained an account.
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 Purshe Kaplan Sterling Investments, 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.
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