It was revealed last week that MD Global Partners, a New York-based brokerage firm, has been fined $40,000 and censured by the Financial Industry Regulatory Authority (FINRA).
MD Global Partners Fined $40,000 by FINRA for Regulatory Failures
The fine and censure are said to be for multiple compliance violations, including failures to implement policies required under Regulation Best Interest (Reg BI).
According to a Letter of Acceptance, Waiver, and Consent published by FINRA last week, the firm failed to establish, maintain, and enforce written procedures reasonably designed to comply with Reg BI between June 2020 and December 2022.
The regulation mandates brokers to act in the best interests of retail clients when making investment recommendations, without placing their own financial interests first.
FINRA said MD Global’s written supervisory procedures contained no provisions relating to Reg BI during the period under review.
The firm also reportedly failed to maintain an adequate supervisory system for Reg BI compliance, breaching FINRA Rules 3110 and 2010 in addition to the Exchange Act.
Further violations are said to have included the late filing—or, in one case, non-filing—of required documentation for 16 private placement offerings between 2019 and 2024, violating FINRA Rule 5123.
Additionally, FINRA said the firm did not complete its mandatory annual compliance certifications from 2019 to 2023, breaching Rule 3130.
MD Global accepted the findings without admitting or denying the violations and agreed to the sanctions. FINRA concluded that the firm has submitted payment details and waived its right to appeal.
