Failure to supervise risky ETF sales costs Sanctuary $530,000
The Indianapolis-based firm, formerly David A. Noyes & Co., agrees to censure, a fine and restitution.
The Financial Industry Regulatory Authority Inc. has censured Indianapolis-based Sanctuary Securities, known as David A. Noyes & Co. until March 2020, for failure to supervise the sales of inverse and leveraged exchange-traded funds.
Finra also imposed a $160,000 fine and required restitution of $370,161.39 plus interest.
In a letter of acceptance, waiver and consent, Finra said that from Jan. 1, 2014, through Dec. 31, 2018, Sanctuary’s supervisory system was not sufficiently tailored to address the unique features and risks of these ETF products.
In addition, Finra found that from January 2017 through January 2019, the firm failed to review and evaluate the outside business activities of approximately 15 of its registered representatives.
From January through December 2018, the firm also distributed sales materials in connection with three private placement offerings that contained prohibited performance projections, and from June 2018 through June 2019, it failed to file offering documents with Finra related to eight private placements that were sold by the firm’s registered representatives.
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