FINRA Fines ViewTrade Securities $40,000 for Supervisory Failures

FINRA has fined ViewTrade Securities, Inc. $40,000 after an investigation revealed serious supervisory deficiencies. The firm, a FINRA member since 1999, was found to have violated FINRA Rules 3110 and 2010 due to its failure to adequately monitor the outside brokerage accounts of its registered representatives.

The Financial Industry Regulatory Authority (FINRA) launched its investigation after identifying lapses in ViewTrade‘s supervisory system dating back to January 2020. The investigation revealed that ViewTrade lacked proper processes to ensure the timely receipt and review of duplicate account statements from employees’ disclosed brokerage accounts. In some instances, these statements went unreviewed for more than six months, which is a violation of industry rules aimed at preventing insider trading and other potential securities abuses.

This latest fine follows a $250,000 penalty imposed on ViewTrade in August 2022 for failing to implement an effective anti-money laundering (AML) program and for inadequate supervision of market access risks. As part of that settlement, the firm had agreed to hire an independent consultant to address its compliance issues.

In this recent case, FINRA found that ViewTrades internal procedures failed to address critical supervisory functions, such as following up on missing account statements and conducting comprehensive reviews to detect potential violations. This led to a censure in addition to the $40,000 fine.

As part of the settlement, ViewTrade has agreed to remedy these issues within 90 days. A senior member of the firms management will be required to certify that the firm has implemented a supervisory system that complies with FINRA rules, including Rule 3110, which governs the supervision of associated persons.

This action underscores FINRAs commitment to enforcing high supervisory and compliance standards across the financial services industry, with a focus on protecting market integrity. ViewTrade accepted the terms of the settlement without admitting or denying the findings.

Final Thoughts

The recent action against ViewTrade Securities highlights FINRA's unwavering stance on maintaining strict regulatory standards to protect market integrity. Despite previous penalties, including a substantial $250,000 fine for anti-money laundering and supervisory shortcomings, ViewTrade‘s latest violations underline ongoing gaps in the firm’s compliance framework. The $40,000 fine, along with mandatory oversight improvements, emphasizes the importance FINRA places on effective internal supervision, especially in areas prone to abuses like insider trading. As the firm works to rectify these deficiencies with new supervisory measures, this case serves as a strong reminder to financial firms of the vital role that consistent and thorough compliance plays in fostering a transparent, secure marketplace.