FINRA Fines WGF Investments $700,000 for Supervisory Failures
The Financial Industry Regulatory Authority is fining WGF Investments $700,000 for failing to commit the attention, time, and resources to certain duties related to supervising registered representatives. WGF is a midsize independent brokerage firm.
According to the self-regulatory organization, from 3/07-1/14, WGF did not supervise private securities transactions of one representative and failed to keep up an adequate supervisory system to make sure that the customer transactions taking place were suitable. The broker-dealer also is accused of not properly supervising one representative’s alternative investment sales.
And, for over a year, WGF purportedly gave a rep a blanket waiver from having to comply with written supervisory procedures related to the sale of private equity, real estate investment trusts, and other alternative investments. A number of the rep’s clients invested over 25% of their liquid net worth in alternative investments, with certain clients putting in over 90%. Meantime, this rep, who is no longer with WGF, routinely spoke on the radio, making misleading and exaggerated statements abut both conventional and alternative investments while favoring the latter. WGF was cited for not properly supervising the radio broadcasts.
The firm is settling without denying or admitting to the FINRA charges.
Deutsche Bank Securities Ordered by CFTC to Pay $3M for Improper Investments and Supervisory, Reporting, and Recordkeeping Violations
Deutsche Bank Securities Inc. (DBSI) has agreed to settle U.S. Commodity Futures Trading Commission charges by paying a $3 million fine. The regulator says the firm did not properly invest customer aggregated funds, failed to put together and file financial reports that were accurate, neglected to keep up the necessary books and records, and committed supervisory failures. Fortunately no investors sustained losses.
According to the CFTC’s order, from 6/18/12 to 8/15/12 Deutsche Bank did not file accurate financial statements with the agency in a timely fashion. The firm purportedly lacked the automated processes to make sure that the financial reporting, some of which had errors, was accurate. Also, says the agency, from 6/18/12 through 8/15/12 Deutsche Bank did not accurately calculate how much there were in customer funds on deposit. Because of certain miscalculations, the firm invested customer funds in specific money market mutual funds during that time. The amounts exceeded the 50% asset-based concentration limit.
Royal Bank of Canada Must Pay $35M for Bogus Sales, Illegal Wash Sales, and Noncompetitive Transactions
A U.S. federal judge is ordering Royal Bank of Canada (RY) to pay a $35 million penalty for its involvement in over 1,000 illegal wash sales, fake sales, and noncompetitive transactions. The ruling comes out of a CFTC complaint in 2012 accusing the bank of wash sales and fictitious sales.
The agency accused senior Royal Bank of Canada personnel of designing a trading strategy that was partially created to generate tax benefits. The sales were noncompetitive transactions, which are prohibited under CFTC regulations.
Finra fines WFG Investments $700,000, Investment News, December 22, 2014
CFTC Orders Deutsche Bank Securities Inc. to Pay $3 Million to Settle Charges of Improper Investment of Customer Segregated Funds, Reporting and Recordkeeping Violations, and Supervision Failures, CFTC, December 22, 2014
Federal Court Orders Royal Bank of Canada to Pay $35 Million Penalty for Illegal Wash Sales, Fictitious Sales, and Noncompetitive Transactions, CFTC, December 18, 2014
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