The Financial Industry Regulatory Authority fined broker-dealer Cadaret Grant $200,000, alleging the Atria Wealth Solutions subsidiary “failed to reasonably supervise” a former broker’s multiple undisclosed securities transactions.
Without admitting or denying the findings, Cadaret Grant Chief Financial Officer and Managing Director Donald Taylor signed a letter of acceptance, waiver and consent on June 4 in which he agreed to the fine and censure. FINRA accepted the letter Wednesday.
Cadaret Grant and Samuel E. Cohen, an attorney for Philadelphia law firm Marshall Dennehey Warner Coleman & Goggin, who represented Cadaret Grant, did not immediately respond to requests for comment on Thursday.
From April 2014 to March 2017, the firm failed to reasonably supervise a registered representative, identified in the letter only as “SP,” who “conducted multiple undisclosed private securities transactions,” FINRA alleged.
The private securities transactions were “part of a Ponzi scheme that SP orchestrated, which resulted in millions of dollars in losses to its victims, including several customers of Cadaret Grant,” according to the regulator. The firm “failed to take reasonable steps to investigate red flags that SP was involved in private securities transactions,” according to FINRA.
As a result of its actions, Cadaret Grant violated retired NASD Rule 3010 (for conduct before December 1, 2014), FINRA Rule 3110 (for conduct on or after December 1, 2014) and FINRA Rule 2010, FINRA said.