Proceeding Number 20070072538-03
Amended Extended Hearing Panel Decision in Department of Enforcement v. Max International Broker-Dealer, Corp.
September 1, 2011
Respondent willfully charged fraudulent, excessive, undisclosed markups on penny stock sales to more than 100 customers, in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and NASD Conduct Rules 2110, 2120, and 2440. Respondent also failed to report equity trades, in violation of NASD Conduct Rule 2110 and Marketplace Rule 6620, and failed to create order memoranda and to keep accurate blotter records, in violation of SEC Rule 17a-3 and NASD Conduct Rules 2110 and 3110. In addition, Respondent failed to enforce its written supervisory procedures, in violation of NASD Conduct Rules 2110 and 3010, failed to maintain and enforce supervisory control procedures, in violation of NASD Conduct Rules 2110 and 3012, and failed to timely update its Form BD and file a required annual certification, in violation of NASD Conduct Rules 2110 and 3013. Finally, Respondent failed to notify FINRA of its intent to maintain electronic storage media and failed to store its electronic records properly, in violation of SEC Rule 17a-4 and NASD Conduct Rules 2110 and 3110. For these violations, Respondent is censured, fined $335,000, and is ordered to pay restitution of $482,111.27 plus accrued interest to customers. In addition to the fines and restitution, Respondent shall pay costs.
This decision has been appealed.
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