Firm to Pay $1.95M to Settle Supervision Claim

     (CN) – San Diego brokerage firm First Allied Securities has agreed to pay $1.95 million to settle claims that it failed to properly supervise a representative who allegedly defrauded two Florida municipalities, the Securities and Exchange Commission announced Friday.




     Between May 2006 and March 2008, the SEC claims First Allied broker Harold H. Jaschke made several fraudulent trades and unsuitable recommendations, and “churned” the accounts of Kissimmee, Fla., and the Tohopekaliga Water Authority.
     The SEC charged Jaschke with fraud last year.
     “First Allied did not fulfill its obligation to reasonably supervise its registered representatives,” said Rosalind Tyson, director of the SEC’s Los Angeles office.
     The SEC says First Allied waited nine months to contact the municipalities about the suspicious trading activity. And the firm’s lack of monitoring allowed Jaschke to route business communications through personal e-mails accounts, which initially kept the fraud concealed, the SEC says.
     The agency’s order implementing the settlement censures First Allied, requires it to disgorge $1.95 million and stops it from committing any future violations.
First Allied also agreed to let an independent consultant review its policies and procedures.
The broker-dealer consented to the SEC’s order without admitting or denying the SEC’s findings.

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