The Financial Industry Regulatory Authority (FINRA) has fined Jeffrey Wayne Cimbal $20,000.00 and suspended him from association with any FINRA member in any principal capacity for five months for failure to review customers' corporate debt or bond transactions. Mr. Cimbal was the Chief Compliance Officer ("CCO") of State Trust Investments, Inc. FINRA determined that Mr. Cimbal failed to detect two representatives' numerous corporate debt transactions that did not provide customers best execution and/or involved interpositioning of an affiliated account. Mr. Cimbal consented to the sanctions and to the findings that he served as his member firm's CCO and for more than three years was in charge of reviewing transactions to ensure that customers received best execution and to conduct surveillance for trading patterns that could potentially violate FINRA rules and federal securities laws.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from abuses. Assuming that a reasonable supervisory system was established by State Trust Investments, Mr. Cimbal failed to take sufficient supervisory action to prevent the trading pattern from continuing. The net result was that the firm and/or accounts of its affiliates made excessive profits from the trading.
If broker-dealers do not establish and/or implement a reasonable supervisory system, they may be liable to investors for damages. In the case of Mr. Cimbal, FINRA found that adequate procedures were not implemented to detect and prevent the trading patterns. Therefore, investors who have suffered damages can bring forth claims to recover losses against State Trust Investments.
Did you suffer losses resulting from State Trust Investments' excessive trading pattern? 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.