Legend Securities Named Respondent for Various Claims

On February 1, 2017, Legend Securities, Inc. (CRD #44952, New York, New York) was named a respondent in a FINRA complaint alleging various claims arising from failures in the firm’s compliance and supervisory systems and procedures.

The complaint alleges that Legend Securities failed to report to FINRA, or failed to timely report, 96 customer complaints sent primarily by electronic mail (some of which were reported more than two years late), and that the firm also failed to timely file amendments to Forms U4 or U5 to report arbitrations and complaints against Legend Securities and its associated persons asserting sales practice violations. The complaint also alleges that the firm failed to establish, maintain and enforce reasonable supervisory systems regarding these matters and for the review of electronic correspondence. The complaint further alleges that Legend Securities failed to establish, maintain and enforce a reasonable supervisory system for heightened supervision in light of the fact that on numerous occasions it failed to consider whether representatives with histories of customer complaints, disciplinary actions or other allegations of misconduct should be placed on heightened supervision. In addition, the complaint alleges that Legend Securities charged customers “handling fees”—which were identified on customer confirmations separate from commissions charged on the transaction—but failed to disclose that such fees, which totaled $870,000 for the relevant period, were in reality additional commissions retained by the firm and not per-ticket, transactional charges. For this conduct, the complaint alleges that the Firm willfully violated Section 10(b) of the Exchange Act and Rule 10b-10.

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956 or by email at [email protected]. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com