Santander Investment Securities Inc., a brokerage firm based in New York, New York, submitted a letter of acceptance, waiver, and consent after the Financial Industry Regulatory Authority (FINRA) entered findings that a registered firm principal had been tasked with gathering interest within the institutional investor community in the U.S. for funds managed by a non-FINRA-regulated fund manager affiliated with the firm but located outside the U.S. The principal, along with other brokers and several non-registered personnel, contacted investors about the future purchase of the non-U.S. funds. FINRA stated that the firm failed to have a registered person supervise the principal and other registered personnel in connection with contacting U.S. institutional investors about the funds. The firm did not have a system to adequately supervise communications between the principal, other brokers, non-registered firm employees, and the investors concerning the purchase of the non-U.S. funds. The firm was censured and fined total of $350,000 for the violations.
Brokerage firms must establish and implement a reasonable supervisory system to protect customers from abusive sales practices. If brokerage firms do not establish and/or implement a reasonable supervisory system, they may be liable to investors for damages flowing from the unsupervised conduct.
FINRA's findings further stated that the communications occurred at presentations to potential investors where sales literature was distributed. The firm did not designate a firm-registered individual to ensure its policies and procedures were enforced in this area. The firm did not apply its existing policies and procedures related to communications with the public and the review and approval of the fund materials and presentations. None of the materials were reviewed or approved by the firm's compliance department to ensure the materials were fair and balanced. The firm also failed to maintain copies of the distributed material as required. Moreover, FINRA stated that the principal distributed communications to the investing public that contained fund materials, which did not provide a sound basis for evaluating the facts and contained exaggerated claims.
Have you suffered losses in your Santander Investment Securities brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is actively investigating and accepting clients with valid claims against Santander Investment Securities stockbrokers who may have engaged in misconduct and caused investors losses.
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.