Clearing Services Firm Fined for Failing to Register Employees
Commentary by Steven Lofchie
A broker-dealer that provided execution, clearing and stock lending services settled charges with FINRA and various securities exchanges for allowing several of its employees to operate in roles for which they were not registered.
In separate Orders (see Primary Sources below), FINRA and the exchanges found that the firm allowed eight individuals to operate in roles without being registered. FINRA also found that the firm failed to establish, maintain and enforce an adequate supervisory system to ensure compliance with registration requirements.
As a result, FINRA found that the firm violated FINRA Rules 1210 ("Registration Requirements"), 1220 ("Registration Categories"), 3110 ("Supervision") and 2010 ("Standards of Commercial Honor and Principles of Trade").
To settle the charges, the firm agreed (i) to be censured and (ii) to pay an aggregate $100,000 fine.
Commentary
This is an instance where the actual rule violation, failure to qualify employees, is very straightforward. Throwing on a Rule 2010 violation adds nothing to the matter. Rule 2010 might as well "say thou shalt violate no other FINRA rule."