California-Based Planmember Securities Corporation Consents to $90,000 Fine and Censure to Resolve Allegations of Violating Several FINRA RulesMonday, July 22, 2019
On July 3, 2019, the Financial Industry Regulatory Authority (FINRA) Department of Enforcement approved a Letter of Acceptance, Waiver and Consent (AWC) submitted by Planmember Securities Corporation, a brokerage firm headquartered in Carpinteria, California. The firm has 310 branch offices and employs 589 registered representatives.
According to the AWC, between July 2012 and June 2016, Planmember failed to establish and maintain a supervisory system and written supervisory procedures (WSPs) reasonably designed to achieve compliance with respect to four aspects of its business: (1) the review of variable annuity exchanges; (2) the review, approval, and retention of consolidated reports; (3) the review of email and customer correspondence; and (4) the review of its registered representatives’ business-related website and social media.
Specifically, Planmember purportedly prepared a spreadsheet each month that summarized all variable annuity transactions and surveilled exchanges through this document. However, the spreadsheet failed to indicate whether transactions were, in fact, exchanges, thus the firm could not determine if any of its customers had rates of exchange requiring further review concerning inappropriate exchanges.
Additionally, the firm was responsible for customizing a third-party template for addressing email review. The firm’s WSPs did not provide guidance as to the quantity of email to be reviewed or the frequency of such reviews. Further, the firm’s WSPs for the review of hard-copy customer correspondence only required a review of this material once every 12 to 36 months during branch examinations. Thus, any sales practice concerns or red flags raised through correspondence would go undetected until these examinations occurred. The AWC also states that the firm was unable to show that it conducted any review of hard-copy correspondence during this time period.
Finally, the firm’s WSPs required a weekly review of registered representatives’ disclosed social media sites to ensure that if it contained business-related static content that could be considered an advertisement, the content received prior principal approval. According to the AWC, Planmember failed to conduct social media reviews 22 times out of a sample of 26 weeks reviewed by FINRA.
Based on the foregoing, the Planmember violated FINRA Rule 2330(d)(1), NASD Rule 2210, 2210, and 2010. Without admitting or denying the allegations made against them, Planmember consented to a censure and $90,000 fine.
If a broker was not properly supervised while registered at a brokerage firm, the firm can be held liable for the broker’s misconduct. Did you invest with a broker at Planmember Securities Corporation and lose money? If so, you may be able to recover from your broker or the firm. Since 1998, our attorneys have been representing victims of investment fraud and broker misconduct. Call us at 877-410-8172 today for a free, no obligation consultation.