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New FINRA Monthly Disciplinary Cases Now Online with Analysis by Bill Singer

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Nov 18, 2010 1:10 pm

New FINRA Monthly Disciplinary Cases Now Online and Analyzed by Bill Singer 

Regulatory lawyer Bill Singer has analyzed and posted the latest crop of FINRA disciplinary cases 

One enterprising registered person funded new customer checking accounts with his own money in order to open them. Then, he made online bill payments from each of the new accounts to credit card accounts in his name in order to qualify for incentive benefits from his firm and to reimburse himself for the initial deposits he made to open the accounts.
How about this clever FINRA sanction: The member firm is suspended until some $42,000 plus in restitution is paid to customers. The fact that the firm previously agreed to pay some $100,000 in restitution (as set forth in a former FINRA Offer of Settlement) but thereafter failed to make the full payment, may have influenced this novel response. 
READ HERE at What's going on with Universal Lease Programs (ULPs)? FINRA cites several violations in November. 
READ HERE at Lease Programs&year=2010
I hate these types of cases but have to report them anyway. A broker gets power of attorney for an elderly client -- soon to be in the throes of dementia and Alzheimer's -- and $358,000 in personal checks from the client somehow find their way into his hands.
And as if the above case weren't upsetting enough, here's another. This guy financially exploited several elderly women through a power of attorney.
READ HERE What harm could it cause if you snuck a peek at your Series 6 study materials in your locker while you take a bathroom break at the exam site?
What do you think happens when you liquidate positions in a dead client's account?



SEC Charges New York Firms and Chief Compliance Officer
for Inadequate Procedures to Protect Nonpublic Information    

From at least September 2005, BRG and its subsidiary, BCM failed to establish, maintain and enforce policies and procedures reasonably designed, taking into account the nature of their respective and interconnected businesses, to prevent the misuse of material, nonpublic information. For 2005, BCM also failed to conduct an annual review of the adequacy of its compliance policies and procedures and the effectiveness of their implementation, as required by the Advisers Act.

In anticipation of the institution of proceedings, Respondents submitted Offers of Settlement (the “Offers”)(without admitting or denying the findings) which the SEC accepted. Respondents consented to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 and Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940, Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”).In the Matter of THE BUCKINGHAM RESEARCH GROUP, INC., BUCKINGHAM CAPITAL MANAGEMENT, INC., and LLOYD R. KARP, Respondents (Order Instituting Administrative And Cease-And­desist Proceedings Pursuant To Sections 15(B) And 21c Of The Securities Exchange Act Of 1934 And Sections 203(E), 203(F) And 203(K) Of The Investment Advisers Act Of 1940, Making Findings And Imposing Remedial Sanctions And A Cease-And-Desist Order, Investment Advisers Act Of 1940 Release No. 3109 / Administrative Proceeding File No. 3-14125, November 17, 2010).

SEC Charges New York Firms and Chief Compliance Officer
for Inadequate Procedures to Protect Nonpublic Information