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March 25, 2016 at 05:32 AM
The Financial Industry Regulatory Authority recently sanctioned Ameriprise for failures to deliver account records to clients at account openings; another firm for supervisory failures regarding charitable and business expenses; and another for violations surrounding the sale of unit investment trusts (UITs).
FINRA: CEO Used Company Money to Buy Relatives’ Art
Banca IMI Securities Corp. was censured by FINRA and fined $250,000 after the agency found that the firm failed to have an adequate supervisory system or WSPs to supervise charitable and business expenses against conflicts of interest.
According to the agency, there were also inadequate procedures to supervise registered principals, including the firm’s then-CEO, or to have any supervisory review of the CEO’s delegated authority with respect to expenses. As a result, the CEO spent nearly $900,000 of the firm’s funds to, among other things, buy certain works of art created and sold by his relatives and fund charitable donations to entities with which he had a personal connection or interest.
The firm also employed a registered representative as chief administrative officer without the appropriate registration, and failed to ensure that he qualified as a general securities principal within 90 calendar days from his association with the firm. Instead, it permitted him to function as a principal without having passed the appropriate exam. Despite him being registered by the firm as a general securities principal, he did not get his Series 24 license until nearly a year after joining the firm in a supervisory capacity.
Without admitting or denying the findings, the firm consented to the sanctions.
Ameriprise Fined Over Unsent Account Records
FINRA censured Ameriprise Financial Services Inc. in Minneapolis and fined the firm $150,000 on findings that it failed to create and send to approximately 219,000 customers an account record within 30 days of the account opening.
According to the agency, the firm realized the failure when it was unable to locate some account records FINRA requested during an examination. The firm determined that the failure resulted from the sequential timing of two automated systems, which work together to identify new accounts requiring the delivery of account records within 30 days of the opening of an account.
The firm created the account records, but only sent them to customers if the systems ran in a particular sequence; otherwise, no records were sent to the customer. Until this was discovered, the firm was unaware that it had to run the systems in the right sequence in order to identify those new accounts.
