Florida-Based Broker Dealer Cited for Inadequate Supervisory System
SRT Securities LLC (CRD #33725) is a Wellington, Florida based brokerage firm that is licensed to operate in 25 states and U.S. territories. In December of 2023, the Financial Industry Regulatory Authority (FINRA) cited this broker-dealer for regulatory violations. The brokerage firm was fined $30,000 and ordered to revise its supervisory procedures to conform with industry rules. Here, our Miami investor losses attorney provides a more detailed account of FINRA’s enforcement action.
Broker-Dealer Sanctions: SRT Securities LLC
SRT Securities LLC is a FINRA member firm that entered the securities industry in 2003. At the time enforcement action was taken, the firm had 27 registered representatives. FINRA determined that the broker-dealer engaged in regulatory violations between 2016 and 2023. Specifically, FINRA investigators determined that SRT Securities LLC failed to develop and implement proper written supervisory procedures (WSPs) to oversee the outside business activities (OBAs) of its brokers. As a consequence, the firm violated FINRA Rule 3270.
Notably, FINRA determined that the broker-dealer was aware that its registered representatives were engaging outside business activities. The OBAs in question related to work with a hedge fund. However, no action was taken to ensure that these OBAs did not adversely affect the financial interests of SRT Securities LLC clients. This despite the fact that the broker-dealer knew or should have known about its obligations. Undisclosed outside business activities by brokers could constitute a conflict of interests. Brokerage firms must ensure that there is no conflict of interest.
FINRA Rules Require Brokerage Firms to Have Adequate Supervisory Standards in Place
FINRA is the self-regulatory body that is responsible for overseeing broker-dealers. These firms have a general responsibility to supervise their individual registered representatives as well as any other associated persons. The requirement is designed to help ensure that firms comply with both legal and regulatory rules that are aimed at protecting investors from fraud and negligence.
Securities industry regulations mandate that brokerage firms must establish and maintain written supervisory procedures (WSPs). These procedures are designed to ensure compliance with applicable securities laws and regulations, as well as with FINRA’s own rules. WSPs define the supervisory structure within a firm, detail the supervisory responsibilities of each member, and set forth the processes for monitoring compliance.
An Overview of the Sanctions Against SRT Securities LLC
Without admitting to or denying any of the specific allegations raised regarding the alleged failure to provide proper supervision, SRT Securities LLC consented to FINRA’s proposed penalties. Most notably, FINRA imposed the following sanctions against this brokerage firm:
- A public censure;
- A $30,000 fine; and
- Remediation of the issues within 90 days.
Contact Our Miami Broker Dealer Negligence Attorney Today
At Carlson & Associates, P.A., our Miami investor losses attorneys have extensive experience handling broker dealer negligence cases. If you or your loved one suffered investment losses, due to brokerage firm negligence, we are here to help. Contact us today to set up your initial consultation. Our firm represents investors throughout Florida.
Source:
brokercheck.finra.org/firm/summary/33725