Corporate & Securities Law

Next Financial Hit With $400K Fine By FINRA

By Keith Griffin

For the third time in three years, Next Financial Group has been fined by the Financial Industry Regulatory Authority (FINRA). The latest is a $400,000 fine, plus $102,000 in restitution to clients.

According to FINRA?s Broker Check Web site, the action is attributed to Next Financial failing to ?have a reasonable system for reviewing the transactions of its registered representatives for excessive trading.?

The allegations by FINRA go on to state that one representative was able to churn client accounts and that Next Financial?s lack of a reasonable supervisory system enabled the activity to go undetected.

In fact, FINRA says Next Financial failed to detect excessive trading by a registered representative in five accounts, resulting in about $102,376 in unnecessary sales charges.

As reported Nov. 30 by Investment News, FINRA also states that Next Financial failed to identify or follow up on other transactions that suggested excessive trading by 13 other reps in 39 additional client accounts.

Even when Next Financial did detect such trades, it took no action, according to FINRA.

Full post as published by Representing Investors on December 03, 2010 (boomark / email).