November 2018 Disciplinary Actions
The following disciplinary actions were taken against both firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules.
Firms Fined
Lincoln Investment Planning, LLC
The Firm was fined $35,000 for failing to implement adequate surveillance procedures to effectively monitor registered representative’s rate of variable annuity exchanges. Since the Firm only monitored exchanges where the Firm acted as the broker, the surveillance report failed to report over half of the variable annuity exchanges conducted by the registered representatives of the Firm. FINRA Case 2017052410201
Cadaret, Grant & Co., Inc.
The Firm was fined $800,000 for failing to implement adequate written supervisory policies and procedures in several different areas. It was found that the Firm failed to implement proper supervision of representatives that ensured customer recommendations were suitable based on securities rules and regulations. The Firm also lacked the appropriate number of principals and failed to establish proper supervisory procedures outlining how principals were to review daily blotters. Additionally, principals were not given adequate tools to monitor trading including exception reports which would be helpful for identifying potentially unsuitable trading activity. Furthermore, the Firm failed to include proper procedures within the WSPs to ensure suitable sales of variable annuities and proper procedures to monitor the variable annuity exchanges. It was also found that the Firm did not have the correct procedures and systems in place to detect consolidated reports, ensure the correct information was being distributed to customers and failed to ensure that registered representatives retained copies of consolidated reports for future verification of value accuracy in the reports. Additionally, the Firm failed to review emails of registered representatives that used their personal email addresses for business. FINRA Case 2014039071101
Individuals Barred
Mark Charles Cohen
It was found that Mr. Cohen prepared and submitted several false expense reports totaling over $14,000. The preapproved expenses were found to be false, as it was found the events he was being asked to be reimbursed for never actually occurred. Cohen created false transaction records to verify the expenses and caused to firm to maintain incorrect books and records. FINRA Case 2014040761001
Gordon Cloutier Jr.
The individual was barred from associating with any FINRA member as Cloutier did not appear and provide on the record testimony regarding FINRA’s investigation into his termination from his member firm. It was found that Cloutier asked a customer for a personal loan and also failed to confirm trading authorization in an attempt to make a trade on the same day he asked for the loan. FINRA Case 2016051652702
Individuals Suspended
Richard Hiroyuki Yada
The individual was fined $5,000 and suspended for two months for conducting discretionary trading without the customer’s authorization and without preapproval for discretionary trading from his member firm. It was also found that the individual engaged in discretionary trading despite attesting on the annual compliance questionnaire that he knew discretionary trading was prohibited at the firm. Yada continued to deny discretionary trading to his member firm until the FINRA investigation began. FINRA Case 2017053623901
Robert Matthew Krieger
The individual was fined $10,000 and suspended for four months for engaging in an outside business activity without prior written approval from his member firm. Krieger had requested to engage in an OBA which would have involved a partnership that offered financial guidance. The member firm did not approve the OBA, but Krieger continued his involvement in the OBA, including researching, soliciting and drafting documents. It was also found that Krieger failed to disclose applicable events on his U4 . FINRA Case 2016051351001
These cases along with others can be accessed by clicking this link.
Please contact an ARG Analyst with any questions regarding the matters discussed.
