Massachusetts securities regulators have charged Fidelity Brokerage Services with unethical and dishonest conduct and practices in the securities business over its rubber-stamping of options trading applications.
Citing the company’s “half-hearted and lackadaisical attitude” toward safeguarding retail investors, the state’s securities division charged Fidelity with “failure to properly vet customers who applied to be approved for options and margin trading.”
Regulators said that Fidelity’s application review system allowed customers to submit multiple applications, each time with the information altered until the customers met the requirements to be approved.
The administrative complaint, filed by Secretary of the Commonwealth William F. Galvin's securities division, details examples of repeated applications – in some instances as many as 13 in one month – with inflated financials, investment experience and employment information that Fidelity reviewers failed to notice, despite having contrary information already in the firm’s system.
The state is seeking to censure Fidelity, require it to retain an independent compliance consultant to remedy the conditions, and impose an administrative fine that a hearing officer will determine at a future date.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
