FINRA Sanctions CV Brokerage Inc., Williamstown, NJ
According to FINRA’s September Disciplinary report, on July 2, 2019, the regulator reportedly sanctioned CV Brokerage Inc. (CRD #462, Williamstown, New Jersey) with a censure and a $100,000 fine.
Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it allegedly failed to establish and maintain a supervisory system and failed to establish, maintain and enforce WSPs, in connection with the participation of firm registered representatives in private securities transactions.
According to FINRA’s findings, a representative of CV Brokerage reportedly participated in multiple private securities transactions, at least two of which are known to have involved firm customers. The representative allegedly formed an investment, managed by her registered investment advisory firm, that reportedly traded hundreds of millions of dollars at multiple financial institutions and exchanges and the representative consequently received substantial selling compensation.
The firm’s WSPs permitted the representative, who was a principal of the firm, to purportedly supervise her own compliance with its private securities transactions procedures, according to FINRA.
FINRA’s findings stated that among other things, CV Brokerage allegedly failed to supervise the representative’s participation in private securities transactions, as well as the securities trading conducted by the investment fund as if it was executed on behalf of the firm.
When a FINRA registered representative conducts business outside the scope of the brokerage firm where they are registered, the act can be considered “selling away.”
Some brokers, looking to supplement their income, will go outside the traditional market, trying to find other products to push.
If a registered broker “sells away” from their firm, the brokerage firm may still be liable for negligent supervision of their broker representative and may be responsible for investment losses in a FINRA Dispute Resolution claim.
For FINRA’s full findings, see FINRA Case #2017052325902
Free Consultation with a Securities Attorney
This information is publicly available on FINRA’s website and provided to you by The White Law Group. If you are concerned about investments you made with CV Brokerage Inc. the securities attorneys at The White Law Group may be able to help.
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