Monthly Disciplinary Actions, August 2012

FINRA issued its monthly compendium of disciplinary actions against firms and individuals. In the category of fines against firms, the most common violations related to (i) short sale violations, particularly not closing out fails, (ii) trade reporting failures under various rules and (iii) excessive mark ups with respect to debt securities. (Firms are advised to review their compliance procedures in all of these areas.)

One of the more interesting disciplinary actions was against a firm that had allowed an individual to trade overnight, from the individual's home, without being subject to the firm's ordinary controls on the size of positions. The individual took a position of excessive size, which he tried to conceal. When the position was discovered, the firm closed it out at a loss. The firm was sanctioned for its failure to control the size of the individual's trades.

View in full here (links externally to FINRA website).