FINRA's complaint also alleges that the firm failed to establish, maintain and enforce adequate policies and procedures, including written supervisory procedures (WSPs), reasonably designed to ensure compliance with the Securities Act to prevent the sale of unregistered securities not exempt from registration. The firm allegedly failed to develop and implement anti-money laundering (AML) policies, procedures, and internal controls reasonably designed to achieve compliance with regulations. The complaint further alleges that the AML procedures failed to address the detection, monitoring, analyzing, investigating, and reporting of suspicious activity in the context of its securities liquidation business. The firm and Mr. Delaney should have detected the suspicious nature of a customer's liquidation of low-priced securities, investigated the activity, and made a suspicious activity report (SAR), but instead they permitted the customer's suspicious trading activity to occur and failed to report any activities.
Moreover, the complaint alleges that the firm either failed to identify or ignored red flags involving numerous instances of potentially suspicious activities and thus failed to sufficiently investigate and report these activities in accordance with its WSPs and implementing regulations. Moreover, the complaint alleges that when the firm became a FINRA member, it agreed as part of its membership agreement that a registered representative or broker would be subjected to heightened supervision. The firm's WSPs required brokers with prior disciplinary disclosures to be placed under heightened supervision, but the firm failed to cause the order memoranda to be initialed prior to the broker's execution of transactions or to verify his customers' account information.
Furthermore, the complaint alleges that Mr. Delaney assigned another principal to conduct the heightened supervision, but the principal was not consistently available to implement such supervision because he reported to work only two or three days per week. In addition, the principal relied on Mr. Delaney to notify him if any of the broker's accounts exhibited third-party trading authority although Mr. Delaney was prohibited from directly supervising the broker due to the firm's membership agreement. The firm also failed to enforce its WSPs and impose heightened supervision on the broker.
Have you suffered losses in your Delaney Equity Group, LLC brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Delaney Equity Group, LLC stockbrokers who may have engaged in misconduct and caused investors losses.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.