StockCross Financial of Beverly Hills, CA Fined $60,000 in April 2009 For Violating NASD Rules

StockCross Financial Services was founded in 1979 (according to their website https://www2.stockcross.com/sc_public_site_new/about.html), and provides a wide range of financial services to clients in over 45 countries. Now headquartered in Beverly Hills, California, StockCross provides online trading services and has branches in Boston, Massachusetts, Philadelphia, Pennsylvania, Orlando, Florida, and in Dallas and Houston, Texas.

In April 2009, StockCross was fined $60,000 for not preserving proper records related to their customers’ accounts. In addition, the firm could not show that they were adequately monitoring communications between StockCross employees and their clients. The regulations requiring brokerage firms to monitor communications and maintain proper records are an important part of the process of making sure brokers follow the rules and meet their obligations to investors.

FURTHER READING:

StockCross Financial Fined $30,000 in 2004 for Multiple, Repeated NYSE Violations

In March 2004, The New York Stock Exchange (NYSE) fined StockCross Financial Services $30,000 for multiple rule violations. An NYSE hearing panel concluded that the firm had failed to properly supervise its own hiring practices, floor brokerage activities, the continuing education of current employees, as well as written records of floor broker activities.

Not only did StockCross permit unregistered brokers to execute trading floor transactions on the behalf of their clients, but also no records were kept of negotiated commission rates of floor transactions or of the transactions themselves. According to NYSE’s record of the arbitration case, which can be found at http://www.nyse.com/pdfs/04-031.pdf, StockCross employed a floor broker who was executing transactions for his own business interests in addition to those of the firm and its clients.

By failing to provide the proper documentation leading up to 2004, StockCross had no way of holding its employees accountable for proper service to their clients.