FINRA fines firm and chief executive $45,000 for associating with disqualified individual
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The Financial Industry Regulatory Authority has fined Quint Capital Corporation $35,000 and its chief executive officer Alexander Quint $10,000 for their role in allowing a broker banned by regulators to work for the firm on 25 municipal securities transactions.
Without admitting or denying the findings, QCC agreed to the fine and a censure and Quint agreed to the fine and a five-month suspension in all his principal capacities.
Individual A, as the banned broker was identified in the filings, was subject to a Securities and Exchange Commission bar as well as enjoined from violating federal securities laws and regulations by a federal district court order and yet QCC and Quint permitted the individual to be associated with the firm, violating FINRA By-Laws Article III, Section 3(b), FINRA Rules 8311 and 2010 and MSRB Rules G-4 and G-5. Rules G-4 and G-5 govern disqualifications and also prohibit individuals from doing muni business when barred by the SEC or FINRA.
In addition to violating those rules on association, QCC and Quint further allowed the individual to engage in activities as an unregistered municipal securities representative, violating MSRB Rules G-2 and G-3.
The matter originated from an arbitration filing, FINRA said, and in November 2019, FINRA was set to allow the individual to associate with the firm as a general securities representative but only following the issuance of an order from the SEC “stating that the SEC would not institute proceedings pursuant to Section 15(b) of the Exchange Act and that it will not direct otherwise pursuant to Exchange Act Section 15A(g)(2),” FINRA said.
That SEC order was never issued and the notice never became effective.
Then a few months later in January 2020, Quint and the firm allowed the individual to act as a municipal securities representative by providing him with passwords and access to the firm’s electronic systems and platforms to trade municipal bonds, FINRA said.
“With QCC and Quint’s knowledge, Individual A referred four customers, including a married couple, to open accounts at QCC, discussed municipal securities transactions with those customers and effected approximately 25 municipal securities purchase and sale transactions for the accounts of those customers,” FINRA said.
A year later in March 2021, Quint fired Individual A by withdrawing FINRA’s membership continuation application, required for all statutorily disqualified individuals associated with a firm and filed a uniform termination notice.
QCC and Quint did not immediately respond to requests for comment for the purpose of this story.
