February 2022 FINRA Disciplinary Actions
Firms Fined
RBC Capitals Markets, LLC
The Firm was censured, fined $550,000 and ordered to pay $456,155, plus interest, in restitution to customers. The Firm failed to establish, maintain, and enforce a supervisory system and WSPs designed to achieve compliance with FINRA and the Municipal Securities Rulemaking Board (MSRB) rules related to the firms registered representatives’ recommendations of high yield corporate and municipal bonds. FINRA found the Firm’s policies and procedures did not address suitability factors that should be considered when recommending high-yield bonds. Additionally, the Firm’s procedures failed to state how much of a customer’s portfolio should be invested in high-yield products based on their profile. The firm also did not utilize the daily and monthly automated alerts they had in place to identify potentially unsuitable concentrations of high-yield bonds in a customer’s account. The Firm also failed to detect that automated alerts related to potentially unsuitable concentrations of high-yield bonds in customer accounts were not working. When the Firm detected that the alarms did not work, they did not attempt to fix them until ten months later, therefore failing to adopt alternative measures to identify potentially unsuitable concentrations of high-yield bonds. The Firm did not notify supervisors about the alerts being ineffective, thus customer accounts were not reviewed for concentrations of high-yield bonds. (FINRA Case #2017054432703)
Barclays Capital Inc.
The Firm was censured, fined $100,000, $33,333 of which is payable to FINRA, and ordered to pay disgorgement in the amount of $218,803.52, $72,934.50 of which is payable to FINRA, plus interest. It was found that the Firm over-tendered shares due to a miscalculation in its long position. When tendering shares, the firm manually calculated its long position using several different systems and miscalculated, missing a short position housed in another system. The firm used an incorrect final tender price when calculating share calls and miscalculated grandfathered calls. This resulted in $218,803.52 of ill-gotten gains. The firm also failed to have a supervisory system designed to comply with Rule 14e-4 of the Securities Exchange Act of 1934.
Individuals Barred
Hayk Papoyan
An AWC was issued and Papoyan was barred from association with any FINRA member in all capacities. The findings stated that Papoyan failed to timely disclose an outside brokerage account to his member firm, opened a brokerage account under his name at an outside firm and did not disclose his member firm evaluation on his account application. It was also found that Papoyan falsely claimed he did not know about or control the brokerage account in an on-the-record testimony to FINRA. He later admitted that those claims were false in a subsequent testimony. (FINRA Case #2020065058201)
Kyle Zachary Wittgren
An AWC was issued and Wittgren was barred from association with any FINRA member in all capacities. The findings stated Wittgren refused to provide an on-the-record testimony to FINRA related to its investigation after receiving a U5 filed by his member firm. The Form U5 disclosed that the firm had permitted Wittgren to resign after admitting to signing clients’ names without their knowledge or consent. Wittgren also submitted unfunded variable annuity rollover applications and altered client email address, violating company policy. (FINRA Case #2021071290001)
Individuals Suspended
Douglas Jarrett Rosenberg
An AWC was issued, and Rosenberg was suspended from association with any FINRA member in all capacities for seven months and ordered to pay $25,000 in partial restitution to customers. The findings stated that Rosenberg excessively and unsuitably traded customer accounts. Customers accepted all recommendations made by Rosenberg and as a result his customers suffered more than $154,000 in realized loses and paid $89,652 in commissions, trading costs and margin interest. (FINRA Case #2019063821605)
Randyl Robert Taber
An AWC was issued, and Taber was fined $5,000 and suspended from association with any FINRA member in all capacities for 20 business days. The findings stated that Taber impersonated a customer twice on a telephone call to a financial services company. Taber first called the company identifying as himself stating he was registered with his firm and requested information about a variable annuity he previously sold to a customer. The financial company refused to provide the requested information as he was no longer the customer’s listed broker. Taber then made a second call to the company, falsely representing himself as the customer. Taber was recognized by the company and, again, the company refused to provide information and notified his member firm of the incident. Taber denied his firm’s allegation twice before being presented with the phone records proving he did so. (FINRA Case #2021070514901)
