Berkshire Global Advisors Fined by FINRA for Supervisory Failures

FINRA said that Berkshire Global Advisors failed to establish and enforce adequate supervisory systems and written supervisory procedures (WSPs) for monitoring its associated persons outside brokerage accounts.

FINRA found that from October 2019, Berkshire’s oversight of outside brokerage accounts was inadequate. 

The firm is said to have failed to implement effective processes to verify disclosures, obtain duplicate account statements, and identify potential violations of securities regulations. 

According to FINRA, these lapses breached its Rules 3110 and 2010, which require firms to maintain systems designed to ensure compliance with securities laws and ethical standards.

For instance, the regulator said Berkshire did not ensure that all associated persons disclosed their brokerage accounts or that it received duplicate statements for monitoring purposes. 

A review revealed that, as of January 2021, more than half of the firm’s employees maintained undisclosed accounts. 

They added that manual reviews of account activity performed by a single individual were deemed insufficient given the volume of statements.

As part of the settlement, Berkshire accepted the findings without admitting or denying the allegations. The firm has been ordered to remediate its supervisory system and provide a certification from senior management within 90 days to confirm compliance.