FINRA Charges Investment Professionals Inc. with Failure to Supervise
Texas-based broker-dealer Investment Professionals Inc. (IPI) has been censured and fined $170,000 by the Financial Industry Regulatory Authority (FINRA).
IPI is headquartered in San Antonio, TX since it was established in 1992, with over $8.2 billion in assets under management and approximately 450 employees, according to their website.
FINRA says IPI allegedly failed to supervise nine of its stockbrokers. The brokers were reportedly considered “dually registered” as securities brokers at IPI and as investment advisers at other firms that had no affiliation with IPI.
IPI purportedly failed to report trades made by the brokers for clients of the advisory firms, FINRA said. Broker-dealers are required to be aware of everything their brokers are doing, such as how they are being compensated and potential conflicts of interest.
According to the settlement documents, the firm accepted FINRA’s findings of violations, consented to the sanctions and waived its right to a hearing, but it did not admit or deny the findings. The document also said the firm has 361 brokers and 305 branch offices.
The settlement document also stated IPI also allegedly failed to maintain a supervisory system meant to comply with securities industry rules. In addition, FINRA found IPI didn’t preserve securities-related emails that were sent and received by five of its brokers in a Pennsylvania branch office.
The nine brokers were not identified by FINRA, but it reported they had more than $500 million in assets under management.
IPI also allegedly failed to maintain a supervisory system meant to comply with securities industry rules, the settlement document showed. In addition, FINRA found IPI didn’t preserve securities-related emails that were sent and received by five of its brokers in a Pennsylvania branch office.
For more information on supervision in the securities industry go to What is Failure to Supervise? (FINRA Rule 3110 Supervision).
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