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Screenshot of a breaking news alert e-mail from Q2 2017
The US Financial Industry Regulatory Authority (FINRA) announced today that it has ordered Monex Securities Inc. to pay $1,100,000 in disgorgement of commissions, plus interest, obtained by unregistered foreign individuals who sold securities on the firm’s behalf.
The company is a Mexican entity and whilst the name is similar, it is important to note that this firm has no connection to the Japanese electronic trading giant MONEX Group, nor the equally similarly named Malaysian FX firm Monex.
FINRA also fined Monex $175,000 for failing to register the foreign representatives and for related supervisory deficiencies over a period of two and a half years. Additionally, Monex’s President and Chief Compliance Officer, Jorge Martin Ramos Landero (Ramos), was suspended from acting in a principal capacity for 45 days and fined $15,000.
FINRA’s rules require any associated individual engaged in the investment banking or securities business to be registered under the appropriate category of registration and the individual must pass the appropriate qualification examination.
FINRA found that Ramos executed an agreement on behalf of Monex with its parent company in Mexico that permitted numerous employees to conduct securities business on Monex’s behalf by, among other things, collecting client information needed to open accounts, making investment recommendations to clients and transmitting orders. Monex paid these individuals transaction-related compensation for these efforts. None of these individuals, however, was registered in any capacity with FINRA. Ramos and Monex also failed to establish, maintain and enforce supervisory systems and written procedures to ensure compliance with applicable securities laws and regulations.
Brad Bennett, FINRA Executive Vice President and Head of Enforcement, said, “It is imperative that firms such as Monex are diligent in ensuring that all individuals who are acting as representatives of the firm are properly registered and supervised. When individuals are permitted by a firm to sell securities on its behalf without being registered and supervised, investors are at risk because of the lack of regulatory oversight.”
In concluding this settlement, Monex and Ramos neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.
For the official announcement from FINRA, click here.