Finra censures Cetera for lax supervision of brokers' outside activities

Regulator also levies $200,000 fine, cites Cetera's failure to review rep's disclosures

Jul 10, 2018 @ 11:26 am

By InvestmentNews

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.

(More: Cetera reportedly exploring $1.5 billion sale)

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

How InvestmentNews picks its Women to Watch winners

The process is laborious and exacting, but well worth it. The end result each year is an impressive group of women in the advice industry from whom others can draw inspiration.

Latest news & opinion

Some good news about female recruitment in financial advice

Each of four core advisory positions tracked in InvestmentNews' benchmarking study has seen an uptick in women entrants.

10 ETFs that are up more than 35% this year

Amid the stock market carnage, there are still some funds posting big gains.

10 biggest HSA providers rated

Morningstar rated the largest plan providers as investment and spending vehicles.

Morningstar: DOL fiduciary rule reduces inflows to mutual funds with high loads

With the measure's demise, will the SEC's advice reform sustain the momentum?

6 tax strategies for year-end planning

How to help clients maximize their wealth using specific tax strategies before the end of the year.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print