FINRA fined firms H. Beck, Inc., LaSalle St. Securities, LLC, and J.P. Turner & Company, LLC a combined $700,000 for various violations, including inadequate supervision of consolidated reports that are provided to customers.
The regulator stated that the three named firms violated both FINRA rules and a 2010 regulatory notice reminding firms that if the firm is unable to adequately supervise the creation and supervision of consolidated report documents—which generally combine information about most or all of a customer's financial holdings regardless of where those assets are held—by ensuring that the reports are accurate, clear and not misleading, it must prohibit those consolidated reports from being distributed by representatives or other associates.
Upon investigation of H. Beck, LaSalle St. and J.P. Turner, FINRA found that numerous representatives and brokers at each of the three firms prepared and disseminated consolidated reports that had not been adequately reviewed by a principal or supervisor and, furthermore, these firms either lacked written procedures specifically addressing consolidated reports or, in the case of LaSalle, failed to enforce its written procedures and failed to adequately train staff regarding consolidated reports.
Chief of Enforcement Brad Bennett explained the problem of inadequate controls around consolidated reporting thusly: "[it] creates the risk that unscrupulous representatives will provide inaccurate and misleading reports to their clients to conceal fraud and theft."
Supervision, FINRA reasoned, dramatically reduces this risk.
If you have invested with H. Beck, Inc., LaSalle St. Securities, LLC, or J.P. Turner & Company, LLC, or another brokerage, and received an inaccurate, unclear or misleading consolidated report, and this prohibited dissemination concealed fraud, theft or has otherwise proven harmful to your investment or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.
News Release: FINRA Sanctions Three Firms for Inadequate Supervision of Consolidated Reports (FINRA)