Enforcement Archive

Dec 14, 2017
Next Financial Group settles Finra supervisory case
Houston-based Next Financial Group will pay a $750,000 fine and hire an outside consultant to check the adequacy of various compliance controls in order to settle claims it failed to fix problems alleged in previous disciplinary actions. According to the Financial Industry Regulatory Authority (Finra), Next responded to those earlier actions – each of which it settled without admitting or denying wrongdoing – by adopting new measures in an effort to correct alle...
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Nov 29, 2017
JPMorgan unit settles employee screening case
JPMorgan Securities has agreed to pay a $1.25 million fine and review certain of its systems and procedures to settle allegations it failed to properly look into the histories of thousands of employees. Specifically, the Financial Industry Regulatory Authority (Finra) alleges in a recent letter of acceptance, waiver and consent (AWC) that JPMorgan Securities from January 1, 2009 through ...
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Oct 19, 2017
Wells Fargo broker-dealers to refund clients over ETP picks
Two Wells Fargo brokerage units have agreed to pay roughly $3.4 million in restitution to clients for allegedly making unsuitable recommendations to buy financial products that were risky to hold on to for long periods of time. The unique features and risks of the products at issue have also prompted the Financial Industry Regulatory Authority (Finra) to issue a notic...
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Oct 02, 2017
Morgan Stanley settles UIT sales supervision case
Morgan Stanley Smith Barney (Morgan Stanley) has agreed to pay roughly $13 million to settle allegations it lacked the proper supervisory system to spot and prevent unsuitable short-term trading in certain client investments. The Financial Industry Regulatory Authority (Finra) alleges that from January 2012 through June 2015, hundreds of Morgan Stanley representatives executed short-term unit investment trust (UIT) rollovers in thousands of customer accounts. In set...
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Sep 26, 2017
Telia settles FCPA allegations
Sweden-based telecommunications operator Telia Company has agreed to pay more than $965 million in a global settlement with US, Swedish and Dutch authorities regarding allegations that it and a subsidiary violated an anti-corruption law. According to the SEC, Telia entered the Uzbek telecommunications market by paying at least $330 million in bribes to a shell company – which was controlled by an unnamed Uzbek government official – under the guise of payments fo...
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Sep 20, 2017
SunTrust Banks unit settles mutual fund fee case
The investment services subsidiary of SunTrust Banks has agreed to pay more than $1 million to settle allegations that it collected fees from clients by improperly recommending more expensive mutual share classes when cheaper shares of the same funds were available. Atlanta-based SunTrust Investment Services (STIS), without admitting or denying wrongdoing, will pay a penalty of more than $1.1 million and disgorge more than $34,000 to settle the civil charges. More t...
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May 31, 2017
OCC eyes communications with boards over violations
Bank in-house legal and governance professionals have been offered more consistency when dealing with regulators over potential enforcements – including in regards to communications with boards and management about their pledges to fix problems. The Office of the Comptroller of the Currency (OCC) will on July 1 implement updated policies and procedures regarding violations of laws and regulations. The changes follow recommendations made in a ...
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May 26, 2017
directors fear liability
Fewer chief compliance officers (CCOs) are living in fear of finding themselves on the wrong end of a lawsuit or regulatory probe, but the vast majority of directors are still afraid, according to new research.  In a survey by DLA Piper, 67 percent of CCO respondents say they are at least somewhat concerned about their personal liability and that of their CEOs, though this is down from 81 percent in 2016. Compliance chiefs have in recent years become worried they c...
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May 25, 2017
whistleblowing encouraged
Employees at broker-dealers and other firms in the derivatives industry are being given renewed encouragement to report to regulators if they see something that appears to break the rules. The Commodity Futures Trading Commission (CFTC) this week approved changes to its rules with the aim of strengthening the agency’s anti-retaliation protections for whistl...
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May 23, 2017
CEO being fired
CEOs may sometimes seem to be unassailable corporate leaders, but new research shows a growing number of them are facing the axe for misbehaving. According to research conducted by Strategy&, PwC’s strategy consulting business, the percentage of CEOs forced out of the corner office due to ethical lapses has increased globally from 3.9 percent between 2007 and 2011 to 5.3 percent between 2012 and 2016. These figures aren’t due to a rise in immorality a...
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