Fidelity Brokerage Services LLC Fined and Censured

According to FINRA, on May 23, 2017, Fidelity Brokerage Services LLC (CRD #7784, Smithfield, Rhode Island) was issued an AWC in which the firm was censured, fined $45,000, required to revise its WSPs, and must offer rescission to the customers who purchased securities at either the original purchase price or the current fair market value, whichever is higher.

Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it effected 15 customer transactions in a municipal security in an amount lower than the minimum denomination of the issue, which was not subject to an exception under MSRB Rule G-15(f).

The findings stated that the firm failed to disclose all material facts concerning 14 municipal securities transactions at or prior to the time of trade. Specifically, the firm failed to inform its customers that the municipal securities transactions were in amounts below the minimum denomination of the issue.

Additionally, the findings also stated that the firm’s supervisory system did not provide for supervision reasonably designed to achieve compliance with respect to the applicable securities laws and regulations, and the MSRB rules, concerning municipal securities transactions effected on behalf of a customer below an issue’s minimum denominations, as stated on relevant offering statements.

For FINRA’s full findings, see FINRA Case #2015046581001.

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This information, which is publicly available on FINRA’s website has been provided by The White Law Group.

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