The following disciplinary actions were taken against both firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules:
Great Point Capital LLC, Chicago, Illinois
The Firm was censured and fined $20,000 for failing to accurately and timely submit Reportable Order Events (“ROE”) to OATS. ROEs were rejected for context and syntax errors but were repairable. The ROEs that were repairable were not repaired timely and several of the resubmissions had the wrong ROE IDs. It was also found that submitted Combined Order Route Reports had incorrect exchange participant IDs reported to OATS, resulting in OATS failing to be able to correctly match the Route Reports to the correct exchange order. The Firm also reported incorrect sent-to-firm MPIDs to OATS, which resulted in OATS failing to correctly match Route Reports to the receiving Firm’s New Order Report.
Stonecrest Capital Markets, Inc. fka Redwine & Company, Inc., Austin, Texas
The Firm was censured and fined $15,000 for failing to report transactions to TRACE in regard to eligible fixed income securities. It was found that the Firm failed to accurately record the terms and conditions of customer orders on its books and records and failed to mark order tickets for securities as “solicited” or “unsolicited.” Instead of marking the ticket “solicited” or “unsolicited”, the ticket was marked “N/A.” FINRA Case #2016048194301
Derek Allen Sunderland, Fargo, North Dakota
Sunderland was barred from association with any FINRA member as it was found that he caused his member Firm to maintain inaccurate books and records. It was found that while a supervisor at the Firm, Sunderland tampered with and falsified documents to make the documents appear to have been reviewed during a supervisory review. When FINRA requested the documents in an 8210 request, Sunderland provided the inaccurate documents. It was also found that he gave a false and misleading testimony to FINRA during his on-the-record interview.
Qianqi Rao , Guangzhou, China
Rao was barred from association with any FINRA member as it was found that Rao reviewed prohibited study materials while sitting for the Series 52 exam. Although Rao had consented to the FINRA Test Center Rules of Conduct, during an unscheduled test break, she accessed her cell phone from her locker and conducted an internet search for test related topics. Rao also reviewed a Series 52 study guide in a restroom during another unscheduled break.
Richard D. Niemann, Missouri City, Texas
Niemann was fined $5,000 and suspended from any member Firm for 15 days. According to findings, Niemann conducted discretionary transactions in customer accounts without prior written authorization from the customer and without his member Firm accepting the particular customer accounts as discretionary. Although many of the customers had implied and expressed verbally, they approved of Niemann exercising discretion in their account, there was no written authorization. FINRA Case #2018057927801
Farrukh Shazad Kazmi, Moorestown, New Jersey
Kazmi was fined $20,000 and suspended for five months for using unapproved communications to conduct securities business. Kazmi was also required to pay back commissions totaling $10,350.71 plus interest for selling initial equity public offerings to a restricted person. Kazmi was explicitly instructed by his supervisor that using instant messaging was prohibited pursuant to the firm’s written supervisory procedures and required to sign an attestation saying he would no longer use instant messaging. Kazmi then continued to use instant messaging and also used text messaging to communicate with Firm customers. This caused the Firm to maintain inaccurate books and records as the communications were not reported or reviewed by the Firm. Kazmi also exercised discretion in customer’s account without written approval from the customer or the Firm. It was also found that Kazmi provided false answers to FINRA regarding the instant messaging, text messaging and discretionary account issues. FINRA Case #2014039169602
Click here to read the Disciplinary Brief in its entirety.
Please contact an ARG Analyst with any questions regarding the matters discussed.