December 2019 FINRA Disciplinary Actions
FINRA disciplinary actions taken against firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules.
Firms Fined
World Equity Group
The Firm was fined $18,500 for failing to report to the Trade Reporting and Compliance Engine (“TRACE”). It was found that the Firm did not report TRACE-eligible corporate debt securities within the proper time period. The findings stated that the firm’s late reporting resulted from delays caused by firm employees and untimely amendments or corrections made to TRACE reports previously submitted by the firm or its clearing firm. FINRA Case #2016052072601
ABN AMRO Clearing Chicago LLC
The Firm was fined $150,000 for understating portfolio margin requirements for accounts. There were several instances in which over-the-counter (“OTC”) equities were treated as marginable securities when they are not margin eligible. As a result, the Firm understated the margin requirements for accounts by millions of dollars. The Firm treated ineligible OTC equities as margin eligible because of an incorrect definition of margin eligible securities followed by the Firm.
Individuals Barred
Preston Kaishen Tsao
Tsao was barred from association with any FINRA member for failing to provide documents related to FINRA’s investigation. It was stated on his most recent Form U5 that Tsao resigned after allegedly receiving a $9,000 cash advance from a client of the Firm. FINRA Case #2018057865701
Ronald James Knight aka Ramone Knight
Knight was barred from association with any FINRA member for converting funds from his member firm. It was found that Knight submitted false expense reports totaling $3,900 in reimbursement of funds. The reimbursements included dinners, drinks and personal expenses. FINRA Case #2017056047701
Individuals Suspended
Brian Daniel Parker
Parker was fined $10,000 and suspended for four months. It was found that Parker directed his assistant to impersonate a customer to obtain a change in beneficiary form for an insurance account held with an insurance company. This lead to Parker instructing his assistant to disregard the customer’s insurance company’s privacy policies. It was also found that Parker forged a second customer’s initials on a suitability form and reused a previously executed signature page from a form, falsifying a transfer of assets.
William J. Schnepp
Schnepp was fined $5,000 and suspended from association with any FINRA member for two months. It was found that Schnepp accepted a power of attorney over an elderly client of the Firm without providing notice nor seeking approval from his member firm and was not a family member of the elderly customer. Schnepp violated the Firm’s policies and procedures, which prohibited a registered representative from being a power of attorney over a customer that he/she is not related to. The power of attorney gave Schnepp authority to manage the customer’s financials. FINRA Case #2018059902901
Click here to read the Disciplinary Brief in its entirety.
FINRA disciplinary actions can be very costly and harm your firm’s reputation. Please contact an ARG Analyst with any questions regarding the matters discussed, or to learn the benefits of our FINRA consulting services.
