The NFA has permanently barred the Randolph J. Ginsberg Introducing Brokerage, Inc (known as “RJ Ginsberg IB”) from Association membership. The firm’s principal, Randolph J. Ginsberg, has been barred for 18 months. The Florida-based Introducing Broker (“IB”) was charged with failing to uphold just and equitable principles of trade in May 2011, and submitted a settlement offer.
According to the original complaint, Ginsberg and the IB placed their desire to generate commissions above their customers’ best interests when they sanctioned the over-trading of customer accounts. They are also found to have failed to supervise their Associated Persons (APs) by allowing the over-trading to occur.
For example, RJ Ginsberg IB and its principal did not ensure that APs had written approval to exercise discretion over customer accounts. They also hired APs from firms with sales violation records and did not enhance their supervision procedures. Instead, they neglected to monitor the aggressive trading strategy employed by the APs, or fix the commission structure that rewarded their lapses in judgement.
Separately, the complaint also alleges that the IB allowed an unregistered individual to perform tasks requiring AP registration, including the solicitation of customers. The firm solicited funds without providing sufficient risk disclosures to potential customers. The IB also falsified the financial/investment experience of at least two of its customers.
The settlement submitted by the Ginsberg and his IB neither confirms nor denies these allegations. The IB will withdraw its membership before it is permanently barred from the Association. Ginsberg will withdraw his membership for 18 months. If, after that time, he wishes to apply for membership again, he will pay a $5,000 fine. He also may not oversee or supervise any APs in the future.
Read more about this NFA enforcement action.
photo credit: Jekkone