CV Brokerage Consents to $100,000 Fine and Censure to Resolve Allegations of Failing to Supervise a Broker’s Participation in Private Securities TransactionsMonday, July 22, 2019
On June 14, 2019, CV Brokerage, a brokerage firm based on Conshohocken, Pennsylvania, agreed to sanctions imposed by the Financial Industry Regulatory Authority (FINRA) Department of Enforcement to resolve allegations of failing to maintain a supervisory system designed to achieve compliance with rules regarding private securities transactions. The firm has a second registered office in New York City and employs approximately 16 registered representatives.
According to the Letter of Acceptance, Waiver and Consent (AWC) reporting the terms of the resolution, Brenda Smith, a registered general securities representative associated with CV Brokerage, participated in several private securities transactions (PSTs), including at least two transactions that involved firm customers. These investment funds traded millions of dollars at several financial institutions and exchanges between February 2016 and June 2019. Smith received substantial compensation for her participation in the fund.
The Department of Enforcement asserts that the firm failed to properly supervise Smith’s participation in these private securities transactions and failed to supervise the securities trading conducted by the investment fund as if it was executed on behalf of the firm. Further, CV Brokerage failed to properly record the securities transactions for the fund and allowed Smith to supervise her own compliance with the firm’s PST procedures. Thus, CV Brokerage failed to establish and maintain a supervisory system reasonably designed to achieve compliance with FINRA Rule 3280(c), 2010, and 3110(a) and (b).
By signing the AWC, CV Brokerage consents to FINRA sanctions, including a censure and a $100,000 fine, without admitting or denying the allegations made against it.
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 Brenda Smith at CV Brokerage, Inc. and lose money? If so, you may be able to recover from her or the firm. Since 1998, we have been representing victims of investment fraud and broker misconduct. Call us at 1-877-410-8172 today for a free, no obligation consultation.