StockCross Financial Services, Inc. (“StockCross Financial”), which was acquired by Muriel Siebert & Co., Inc. (“Muriel Siebert”), consented to a censure and $250,000 fine in connection with FINRA’s findings that between July 2009 and December 2019, StockCross Financial had no reasonable surveillance system to review solicited transactions for excessive trading and suitability.
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FINRA Letter of Acceptance, Waiver, and Consent No. 2018058595601
StockCross Financial and FINRA entered into a Letter of Acceptance, Waiver, and Consent No. 2018058595601 (“AWC”) on July 14, 2021.
According to the AWC, between July 2009 and December 2019, StockCross Financial had no reasonable surveillance system to review solicited transactions for excessive trading and suitability. StockCross Financial delegated trade surveillance to certain principals but took no steps to determine whether these designated principals were, in fact, reviewing solicited transactions for suitability and excessive trading, which they were not. Additionally, until 2017, the firm did not provide exception reports to assist in identifying potentially excessive trading or churning and reviewing customer account losses. When instituted, the firm’s exception reports were not reasonably designed to identify excessive trading.
StockCross Financial’s supervision of solicited transactions was not reasonably designed and therefore violated NASD Rule 3010 and FINRA Rules 3110 and 2010.
Because of its inadequate supervisory system, StockCross Financial failed to reasonably supervise a broker who FINRA investigated for excessive trading of the accounts of two senior customers.
Furthermore, between July 2009 and June 2017, StockCross Financial permitted an employee to function as a principal and to supervise options transactions without obtaining the necessary securities registrations in violation of NASD Rule 1021(a) and FINRA Rule 2010.
Separately, FINRA also found that StockCross Financial failed to comply with the possession-or-control requirements of Exchange Act Rule 15c3-3.
Finally, between September 2017 and February 2019, StockCross failed to store over 30,000 emails of sixteen associated persons in an easily accessible place. Consequently, StockCross violated Section 17a of the Exchange Act, Exchange Act Rule 17a-4(b)(4), and FINRA Rules 4511 and 2010.
StockCross Financial Services, Inc.
StockCross Financial Services, Inc. became a FINRA member in May 1972. Effective January 1, 2020, after the events at issue, StockCross Financial was merged with and into Muriel Siebert & Co., Inc.
During the relevant period, StockCross Financial had thirteen branch offices and approximately fifty registered representatives. StockCross Financial primarily operated as a discount broker, with much of its business consisting of unsolicited, customer-directed, online equity trading.
In February 2009, in AWC No. 2007009467901, StockCross Financial consented to a censure and $60,000 fine in connection with FINRA’s findings that the firm violated NASD Rules 3110(a) and (b) and 2110, Section 17(a) of the Exchange Act, and Rules 17a-3 and 17a-4 thereunder, by failing to preserve all employee emails, demonstrate supervisory review of employee email and facsimile communications, and maintain complete new account documentation.
How to Recover Losses or Obtain a Free Consultation
If you have lost money with StockCross Financial Services, Inc., contact New York securities arbitration lawyer August Iorio of Iorio Altamirano LLP at email@example.com or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.