WASHINGTON – Landolt Securities, Inc. has been ordered by the Financial Industry Regulatory Authority to pay $20,000 for violating municipal trade, books and records and supervisory rules.
FINRA announced the sanctions in its latest monthly disciplinary actions.
The Oshkosh, Wis.-based firm neither admitted nor denied FINRA’s findings but agreed to the payment to settle the charges.
Paul Pavelski, president of the firm, said, “It was a misunderstanding by our clearing firm that caused the issue.”
According to FINRA, Landolt during part of 2012 and 2013 erroneously believed that its clearing firm was reporting all of its municipal securities transactions to the Municipal Securities Rulemaking Board. However, the clearing firm was not reporting the sell-side of the transactions, which it failed to report to the firm and the firm failed to detect.
FINRA charged the firm did not accurately record the date and time of receipt for 31 of a sample of 50 customer orders involving munis between Feb. 17, 2012 and Sept. 30, 2013, in violation of the MSRB’s Rule G-8 on books and records.
The firm also failed to report to the MSRB 50 of 173 muni transactions during the same period, in violation of MSRB Rule G-14 on muni trade reporting, the self-regulator said.
Further, FINRA charged that Landolt did not implement an adequate supervisory system and failed to establish written supervisory procedures that were designed to ensure that all muni transactions were reported to the MSRB on its behalf by its clearing firm. This conduct violated the MSRB’s Rule G-27 on supervision, FINRA said.
The $20,000 fine for the muni violations was part of a total $25,000 fine that also covered net capital and related violations.
