FINRA Fines Santander Securities, LLC $6.4 Million For Supervisory Failures

by Gray on October 15, 2015

in Uncategorized

On October 13, 2015, the Financial Industry Regulatory Authority (FINRA) ordered Santander Securities, LLC to pay $4.3 million in restitution to customers who were solicited to purchase Puerto Rican Municipal Bonds (PRM Bonds). Santander was also fined $2 million for supervisory failures related to sale of PRM Bonds, and an additional $121,000 in restitution to customers

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According to FINRA, between December 2012 and October 2013 Santander did not ensure that its proprietary product risk-classification tool accurately reflected market risks of investing in PRM Bonds and failed to adequately supervise its customers’ use of margin and concentrated positions in their accounts.

Additionally, FINRA found Santander failed to reasonably supervise employees trading in its Puerto Rico office with a view toward potential conflicts of interest where customer orders were filled through positions held in their own broker’s personal brokerage account. Because Santander allegedly did not have adequate systems in place, approximately 400 of these types of transactions totaling $500 million went undetected.

Santander is not the only firm to be fined by FINRA recently over the sale of PRM Bonds. Last month UBS reached a settlement for $34 million with FINRA and the Securities and Exchange Commission (SEC) over the PRM Bonds.

If you believe you have been the victim of stockbroker misconduct, you may wish to consult an attorney to find out more about your legal rights and options. Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

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