South Florida Arbitration & Litigation Lawyer Blog
South Florida, FINRA Securities Arbitration Attorney, Russell L. Forkey, Esq.
Please keep in mind FINRA’s Issuance of a disciplinary complaint represents FINRA’s initiation of a formal proceeding in which findings as to the allegations in the complaint have not been made, and does not represent a decision as to any of the allegations contained in the complaint. Because these complaints are unadjudicated, you may wish to contact the respondents before drawing any conclusions regarding the allegations in the complaint.
iTRADEdirect.com Corp. (CRD #18281, Boca Raton, Florida) was named as a respondent in a FINRA complaint alleging that the firm operated a boiler room out of a branch office, and it and its registered representatives engaged in cold-calling potential customers and creating accounts and buying stock for persons who did not agree to buy stock or open accounts. The complaint alleges that the firm and representatives created new account forms that misstated the customers’ net worth, income, investment experience and/or risk tolerance, and the representatives often failed to ascertain this information, making it impossible to fulfill their suitability obligations. The complaint also alleges that the firm, through its registered representatives, created false new account documentation, including falsified New Account Information sheets and New Account applications for customers, that set forth false, inaccurate and/or baseless information regarding the customers’ income, net worth, investment experience, risk tolerance and/or social security numbers. The complaint further alleges that the firm, directly, and as control person over its registered representatives, knowingly used margin without its customers’ permission, and in direct contravention of the customers’ instructions. In addition, the complaint alleges that the firm failed to report customer complaints and entered into settlements with customers without disclosing the underlying complaints; failed to maintain accurate books and records to reflect all of its actual and contingent liabilities; failed to accurately calculate and report its net capital, net capital requirement and excess net capital; operated while in net capital deficiency at various times; and failed to provide notice to the SEC and FINRA of its net capital deficiencies. Moreover, the complaint alleges that the firm refused to allow FINRA staff prompt access to its computers to inspect and copy its books and records as part of an on-site examination. (FINRA Case #2009016159101).
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