In mid-September, the SEC ordered Raymond James Financial Services (RJFS) to pay a $6.9 million fine for failing to supervise Dennis Herula, a former broker who's in prison after pleading guilty to federal fraud charges.
In addition, David Lee Ullom, the manager of the RJFS branch in Cranston, R.I., where Herula worked, must pay a civil fine of $100,000. He is also suspended from working for a broker/dealer for one year, and barred from acting in a supervisory capacity for any b/d for life. RJFS' then-president and CEO, J. Stephen Putnam was also fined $200,000 and suspended for 90 days for his part in failing to supervise Herula.
The takeaway? Regulatory agencies are now moving to hold higher-ups at brokerage firms personally liable when reps working for them are charged with illegal conduct.