According to FINRA, “Scottrade failed to establish, maintain, and enforce a supervisory system” regarding “wire transmittals from customer accounts to third party accounts” between October 3, 2011 and October 21, 2013. Failure to maintain and enforce supervisory systems is a violation of securities industry regulations.
FINRA says that it warned Scottrade back in 2011 that its supervisory system for third party wires was lacking because it should have notified customers of wires of $500,000 or less. In response to FINRA’s warning, Scottrade allegedly said that they would change its third party wire supervisory procedures, but FINRA claims that Scottrade did not make any changes until October 21, 2013.
Sufficient supervisory systems are necessary to ensure that investors are properly informed and protected with regard to their investments. As a result of FINRA’s findings, Scottrade consented to a censure and paying a $300,000 fine.
If you or someone you know has lost money due to suspected misconduct, we invite you to contact an investment fraud lawyer at Meyer Wilson. Since 1999, we have been protecting investors and fighting to recover their losses by winning judgments, settlements, and verdicts against brokerage firms, financial advisors, and banks. Get in touch with us today for a free review of your case.