The Securities and Exchange Commission has sustained the Financial Industry Regulatory Authority in fining a broker-dealer and its chief compliance officer – and suspending the CCO – for failing to reasonably supervise a registered representative's unregistered sale of securities. SEC and FINRA have rewarded firms for investigating potential violations, remediating any harm done, strengthening their internal controls and self-reporting the alleged misconduct, and SEC Chairman Mary Jo White has said the SEC may require firms to admit their misconduct in appropriate cases. But the ruling shows that, despite industry hopes to the contrary, not contesting alleged violations will not guarantee the target of a regulatory investigation a better outcome, Paul J. Bazil, Esq. a partner in the law firm Pickard and Djinis, LLP, which represented the respondents, told Compliance Complete. FINRA fined the firm, Salt Lake City-based ACAP Financial, Inc. $50,000 for its unregistered sales of securities
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