Harrison transferred customer funds out of bank accounts linked to the firm’s securities accounts into a single online account at another broker-dealer.
Harrison transferred funds that totaled at least $6.5 million belonging to multiple customers. Harrison established the online account in a relative’s name, but he had sole control over the online account and conducted significant options trading in the account, using the customers’ funds and engaging in the trading without the affected customers’ knowledge or consent. Harrison subsequently transferred some of the funds out of the online account to unknown destinations.
Harrison failed to respond to FINRA requests for information and failed to appear for a FINRA on-therecord interview.
Acting through Rodgers,NWT:
Each of the above noted accounts came to the firm as part of a mass transfer of accounts from a former member firm.
Acting through Rodgers and Niederkrome, the firm failed to implement portions of its supervisory control procedures, in that Rodgers and Niederkrome failed to test and verify that the firm’s supervisory control procedures and policies were reasonably designed to achieve compliance with applicable rules; and, prepare and submit a report to senior management detailing the firm’s system of supervisory controls, the summary of the test results, significant identified exceptions and any additional or amended supervisory procedures created in response to the test results.
Rodgers and Niederkrome failed to complete an annual certification pursuant to NASD Rule 3013(b), verifying that the firm had in place processes to establish, maintain, review, test and modify written compliance policies and written supervisory procedures to comply with applicable securities rules and regulations.
Censured; Fined $10,000 jt/sev with Niederkrome and Rodgers; Fined additional $5,000 jt/several with Rodgers
David Eric Niederkrome: Censured; Fined $10,000 jt/sev with NWT and Rodgers;
Stephen Rudolph Rodgers: Censured; Fined $10,000 jt/sev with NWT and Niederkrome; Fined additional $5,000 jt/sev with NWT