[Image: Football Game Plan / Wikihow.com]

by Howard Haykin

Among other things, the GSP was required to: (i) preapprove all purchase and sale orders the broker submitted prior to execution; (ii) verify each and every order with the customer; (iii) review customer accounts for excessive trading and churning – especially those accounts appearing on Windsor Street Capital's monthly ‘Active Account Report’; and, (iv) document all reviews and follow-up activities.

However, over the next 10 months, the GSP failed to follow the Game Plan. For example, as it pertained to 2 customer accounts, the GSP:

• Did not pre-approve trade orders for those accounts.
• Failed to verify each order with the customers.
• Failed to investigate when a customer’s account appeared on the Active Account Report.
• Expressed little or no concern for the high level of speculative trading in the account of one customer, 81, who sought only “growth and income.”
• Failed to follow up with one customer who questioned the broker’s aggressive and frequent trading in his account.

Sadly, despite his repeated failures, this GSP was given just a ‘slap on the wrist’ by securities regulator FINRA - a $5,000 fine and a 60-day suspension from serving as a supervising principal.

[For further details, click on … FINRA Case #2017052475702.]