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Cetera Censured and Fined $200,000 for Failure to Supervise


FINRA Censures Cetera for barred brokers’ outside activities.

According to the Financial Industry Regulatory Authority (FINRA), the regulator has censured Cetera Financial Specialists and fined the firm $200,000 for supervisory failures in connection with its brokers’ outside business activities.

Between January 2012 and December 2014, FINRA alleges that Cetera Financial failed to establish, maintain and enforce a supervisory system, including written supervisory procedures that would reasonably consider whether its brokers’ outside activities would interfere with or compromise their responsibilities to their clients and Cetera.

On April 22, 2015, the advisor reportedly consented to a bar from the securities industry and to FINRA findings that he misused at least $75,500 from an elderly woman’s retail bank account for his own use.

At the time, according to FINRA, the broker was power of attorney over the accounts of two senior customers, a 94-year-old and her 75-year-old son-in-law, as well a beneficiary of the elderly woman’s estate. Although the advisor had disclosed the nature and extent of his outside relationships with these clients to Cetera on three occasions, the firm “did not timely review, evaluate or respond” to the broker’s disclosures, according to FINRA.

Failure to Supervise

Brokerage firms are required to properly supervise their advisors. They must ensure that those advisors are complying with applicable FINRA rules and regulations. If it can be demonstrated that the firm failed to properly supervise its advisors, the firm may be held responsible for the losses in a FINRA arbitration claim.

If you are concerned about your investments with Cetera Financial Specialists and would like a free consultation to discuss your litigation options, please call the offices of The White Law Group at 1-888-637-5510.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.


Tags: , , , , , , Last modified: April 10, 2023