South Florida Arbitration & Litigation Lawyer Blog
FINRA Municipal and Corporate Bond Fraud and Misrepresentation Arbitration Attorney, Russell L. Forkey, Esq.
July, 2011:
Janney Montgomery Scott LLC (CRD #463, Philadelphia, Pennsylvania) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $75,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to deliver official statements by the settlement date to numerous customers who purchased new issue municipal securities during the primary offering disclosure period; in each of these transactions, the firm was neither an underwriter nor part of the underwriting syndicate. The findings stated that the firm failed, among other things, to document the type of disclosure sent and the name of the person sending the disclosure, each of which was required by MSRB Rule G-8(a)(xiii). The findings also stated that the firm allowed a third-party service provider to deliver official statements to firm customers. The findings also included that the firm failed to enforce its WSPs pertaining to its official statement delivery requirements to customers and its requirements to maintain various records pertaining to its obligation to deliver official statements to customers who purchased new issue municipal securities. FINRA found that the firm’s WSPs specifically required firm operational personnel to conduct periodic reviews of the service provider to ensure that the official statements were timely delivered, but the firm’s operational personnel failed to conduct a sufficiently thorough review of the service provider, or an adequate number of reviews, and in certain instances, failed to verify timely delivery of the official statements. (FINRA Case #2009018503501).