Broker Settles FINRA Charges for Mismarking Order Tickets as Unsolicited
Commentary by Steven Lofchie
A broker settled FINRA charges for mismarking order tickets, causing his firm to maintain inaccurate books and records.
According to the AWC, during the relevant period, the broker mismarked "1,399 order tickets for securities transactions." FINRA stated that although the broker recommended these transactions to his customers—which required the tickets to be marked as "solicited"—he incorrectly marked them as "unsolicited." FINRA found that this misconduct caused his firm to make and preserve inaccurate books and records regarding the terms and conditions of the brokerage orders.
FINRA concluded that the broker violated FINRA Rules 4511 ("General Requirements") and 2010 ("Standards of Commercial Honor and Principles of Trade").
To settle the matter, the broker agreed to a two-month suspension from associating with any FINRA member in all capacities and a $10,000 fine.
Commentary
There is zero logic to the penalty amounts that FINRA imposes on individuals. The broker clearly violated the rules, so there is no defense to that. But it is not clear why his fines should equal those of brokers who effectively steal significant amounts of money from customers.