FINRA Censures & Fines McNally Financial for Supervisory Failures with Complex Options Trading Strategies
According to the Financial Industry Regulatory Authority (FINRA), the regulator has censured and fined McNally Financial Services Corporation (CRD#: 121196/SEC#: 8-65388) in connection with the sale of nontraditional exchange traded products.
From March 2014 through March 2019, McNally Financial allegedly failed to establish and maintain a supervisory system and enforce written supervisory procedures (WSPs) in relation to the sale of nontraditional exchange traded products (NT-ETPs), according to FINRA. The firm also reportedly failed to reasonably supervise a registered representative who recommended complex options trading strategies to customers. McNally was reportedly aware of red flags in the options trading that indicated the trading and strategy may be inconsistent with the customers’ investment profiles but purportedly failed to take reasonable action to investigate these red flags.
According to FINRA, McNally Financial reportedly consented to the sanctions of a censure and $35,000 fine and will ” revise its WSPs, established and implemented policies, procedures, and internal controls reasonably designed to address the deficiencies identified in this AWC.”
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Last modified: November 29, 2021
