MFDA fines firm $125,000 for compliance, supervisory failures

An MFDA hearing panel approved on Thursday a settlement agreement with a firm for supervisory and compliance failures.

Equity Associates Inc. was fined $125,000 and ordered to pay costs of $20,000.

In the settlement agreement, Equity admitted “that it failed to adequately supervise or failed to maintain adequate records of the supervision at its Head Office, sub-branch level and branch level,” an MFDA release said. The failures related to daily trading activity, leveraged accounts, and approval of new accounts and amendments to KYC information.

The firm also “failed to adequately supervise or didn’t maintain adequate records for the supervision of” the concentration of sector mutual funds in client accounts, the release said.

In addition, Equity Associates admitted that it “failed to establish, implement and maintain adequate policies and procedures to conduct trend analysis reports to supervise its Approved Persons trading activity,” or maintain “adequate compliance resources,” the release said.

It also didn’t conduct “reasonable supervisory investigation[s]” into one approved person charged with a criminal offense related to alleged conduct involving clients, and another regarding suitability concerns, the release said.

Read the settlement agreement here.

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