News & Insights

6 Results
December 29, 2015

FINRA ordered an investment bank to pay more than $10 million in restitution for suitability violations relating to mutual fund transactions. FINRA found that from January 2010 through June 2015, the bank's supervisory systems were not sufficient to prevent unsuitable switching. In particular, the firm incorrectly defined a mutual switch in its supervisory procedures to require three separate transactions within a certain time frame. Based on this incorrect definition, the bank (i) failed to act on thousands of automated alerts for potentially unsuitable transactions, (ii) excluded

December 18, 2015

The CFTC settled charges against an investment bank that failed to disclose certain conflicts of interest to clients. Specifically, the bank failed to disclose its preference for investing client funds in certain commodity pools or exempt pools, namely hedge funds and mutual funds managed and operated by an affiliate and subsidiary of the bank. The CFTC required the bank to pay a $40 million civil monetary penalty, to disgorge $60 million and to cease and desist from further violations.