The Financial Industry Regulatory Authority Inc. has censured Cetera Financial Specialists and fined the firm $200,000 for supervisory failures in connection with its brokers' outside business activities.
Finra said that between January 2012 and December 2014, Cetera "failed to establish, maintain and enforce a supervisory system, including written supervisory procedures," that would reasonably consider whether its brokers' outside activities would interfere with or compromise their responsibilities to their clients and Cetera.
The case prompting the action involved broker Alex P. Anderson, who was awarded power of attorney over the accounts of two senior customers — a 94-year-old and her 75-year-old son-in-law. Mr. Anderson also was a beneficiary of the elderly woman's estate. On April 22, 2015, Mr. Anderson consented to a bar from the securities industry and to Finra findings that he misused at least $75,500 from the elderly woman's retail bank account for his own use.
Finra said that before these events occurred, Mr. Anderson had disclosed the nature and extent of his outside relationships with these clients to Cetera on three occasions.
"However, the firm did not timely review, evaluate or respond to Mr. Anderson's disclosures," Finra said in a letter of acceptance, waiver and consent.