Illinois-based JVM Securities has been hit with penalties over violations involving compliance with Regulation Best Interest and Form CRS requirements, ThinkAdvisor reports.
According to the Financial Industry Regulatory Authority’s letter of acceptance, waiver and consent, the firm was fined $60,000 and censured for its actions. JVM Securities accepted and consented to the FINRA findings without admitting or denying them.
FINRA found that since June 30, 2020, JVM failed to establish and maintain written policies and procedures, and a supervisory system, reasonably designed to achieve compliance with Securities Exchange Act of 1934 Rule 15l-1 (Reg BI).
Furthermore, between June 30, 2020, and July 18, 2023, JVM Securities also failed to establish and maintain a supervisory system, including written supervisory procedures (WSPs) reasonably designed to achieve compliance with its obligations to prepare, file, and deliver its customer relationship summary (Form CRS) These were both violations of FINRA Rule 3110, requiring adequate supervisory systems, and Rule 2010, requiring high standards of commercial honor and just and equitable principles of trade.
FINRA added that JVM Securities failed to comply with its regulatory obligations relating to private placement offerings.
“The firm failed, from April 2020 to March 2022, to timely file required documents with FINRA for three
private placement offerings that the firm sold to retail investors, in violation of FINRA Rules 5123 and 2010,” according to FINRA’s letter. “Additionally, from October 27, 2018, to February 28, 2022, JVM Securities failed to establish and maintain a supervisory system, including WSPs, reasonably designed to achieve compliance with FINRA Rule 5123. During this period, the firm’s WSPs designated an individual who was no longer associated with the firm as the principal responsible for filing with FINRA required documents related to private placement offerings.”
The settlement letter noted that while JVM Securities acted as agent for private placement offerings that it has recommended to retail customers since June 30, 2020, its written policies and procedures contained no provisions relating to Reg BI until March 1, 2022.
After that date, “the firm’s various updated versions of its policies and procedures have discussed Reg BI only in general terms, have not been tailored to the firm’s business, and have not prescribed procedures for complying with Reg BI,” the order states.
JVM Securities agreed that within 60 days of the AWC letter, a member of its senior management will certify in writing that the firm has remediated the issues identified in the investigation, and implemented written policies and procedures, and a supervisory system, including WSPs, reasonably designed to achieve compliance with Regulation Best Interest.
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