Venecredit Securities has been fined $25,000 and censured for generating retail business for two years through foreign finders associated with a foreign broker-dealer. FINRA found that the foreign finders were the main contacts between the clients and the firm, and they had access to account information through the platform of the firm's clearing firm. The foreign finders were all employees of a foreign broker-dealer that Venecredit and its wholly-owned entity have officers and directors in common with. The foreign finders worked primarily out of offices of the foreign broker-dealer in a foreign country.
In addition, FINRA found that Venecredit failed to create and implement an adequate supervisory system to review customer complaints presented to the foreign broker-dealer employees that should have been conveyed to and reported by Venecredit. Venecredit also failed to retain business-related electronic communications for the foreign finders associated with the firm. Moreover, FINRA found that Venecredit failed to retain electronic communications for its registered representatives personal email accounts, which were being used for business activity.
Broker-dealers must establish and implement a reasonable and adequate supervisory system to protect clients from abuses. If broker-dealers do not establish and/or implement a reasonable supervisory system, they may be liable to investors for damages. Venecredit clearly did not establish and implement a reasonable and adequate supervisory system to monitor its foreign finders' activities and address client complaints. As a result, an investor who has suffered damages can bring forth claims to recover losses against Venecredit Securities resulting from its failure to supervise.
Have you suffered losses resulting from Venecredit Securities' lack of supervision over its sales representatives? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.