FINRA sanctions B. Riley Wealth Management for Supervisory Issues
According to a Letter of Acceptance, Waiver and Consent (AWC) signed on December 30, the Financial Industry Regulatory Authority (FINRA) has sanctioned B. Riley Wealth Management (formerly known as Wunderlich Securities) for supervisory failures connected to recommendations of 529 Savings Plans.
From January 1, 2013 through June 30, 2018, the firm reportedly failed to establish and maintain a supervisory system reasonably designed to supervise representatives’ recommendations to customers to purchase particular share classes of 529 savings plans, according to the AWC.
B. Riley failed to provide adequate guidance to registered representatives regarding the importance of considering share-class differences when recommending 529 plans, and they did they provide supervisors with adequate guidance or information to properly evaluate the suitability of 529 share-class recommendations.
FINRA said that the firm also failed to establish controls designed to ensure consistent supervisory review at account opening; and supervise 529 share-class recommendations executed through transactions made directly with plan fund companies.
The firm reportedly self-reported potential issues with its supervisory system to FINRA as part of FINRA’s 529 Plan Share Class Initiative announced and proposed a plan to remediate affected customers in the total amount of $252,740 and a censure, but no fine.
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