Selling Away and Outside Business Activity Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
The Securities and Exchange Commission Sustains Disciplinary Action Against Howard Braff
The SEC recently announced that it has sustained disciplinary action against Howard Braff, formerly registered as a general securities representative, general securities principal, and options principal with various FINRA member firms. The Commission found that Braff violated NASD Rule 3050(c) and Rule 2110 because he failed to provide written notice of his outside brokerage accounts to three member firms with which he was associated, and failed to provide written notice of his association with the member firms to the brokerage firms where he maintained the outside accounts. FINRA also found that Braff violated Rule 2110 because he falsely stated on certain employment documents that he had no outside brokerage accounts.
In sustaining the $25,000 fine and two year suspension imposed on Braff, the Commission agreed with FINRA that “Braff purposely thwarted safeguards intended to protect the integrity and transparency of the securities industry, and in so doing, created an environment ripe for customer abuse.” The Commission found that the sanctions are remedial because they will deter Braff and others from failing to disclose information about outside brokerage accounts and firm associations thereby protecting the investing public by facilitating more direct and early detection of potential rule violations, such as a conflict of interest with a firm or its customers.
To review a complete copy of the SEC’s ruling, please follow the highlighted link.