FINRA Sanctions Ecoban Securities Over Inadequate Supervision Procedures

Posted on February 24th, 2022 at 12:41 PM
FINRA Sanctions Ecoban Securities Over Inadequate Supervision Procedures

From the Desk of Jim Eccleston at Eccleston Law:

The Financial Industry Regulatory Authority (FINRA) has sanctioned Ecoban Securities Corp. and imposed a $40,000 fine after the firm allegedly violated rules designed to ensure adequate supervision of its advisors.


According to the SEC, Ecoban typically provides services in the equity and debt markets, including private equity placements and initial public offerings (IPOs). Ecoban Securities is owned by Stephen deGot and has been registered with FINRA since 1992. FINRA determined that Ecoban filed to collect outside brokerage account statements from six of the firm’s twenty-eight outside representatives between 2016 and 2020. That shortcoming meant that Ecoban was unable to monitor the accounts for illegal trading practices, including insider trading.


FINRA also alleged that several representatives informed the firm that they were involved in outside business activities (OBAs). However, Ecoban failed to review or assess whether the OBAs constituted potential conflicts, according to FINRA. Ecoban additionally failed to preserve and examine messages transmitted via outside email systems by at least thirteen representatives between April 2019 and April 2020, according to FINRA. Ecoban Securities and deGot consented to the sanctions without admitting or denying any of FINRA’s investigatory findings.


Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

 
 

Tags: eccleston, eccleston law, finra

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