You know you’ve failed as a CCO when you get barred by FINRA

finra

The Financial Industry Regulatory Authority permanently barred Tod Bretton, former chief compliance officer and head trader for Prestige Financial Center, Inc.

“FINRA found that, from at least September 2006 through June 2009, Bretton, working from the firm’s New York office, engaged in a fraudulent trading scheme in which he took advantage of customers placing large orders (generally 1,000 shares or more) to buy or sell stocks. Rather than effecting the trades in the customers’ accounts, FINRA found, Bretton first placed the orders in a firm proprietary account. He would then increase the price per share for securities purchased by approximately $.02 to $.05 above the market price before allocating the shares to the customers’ accounts. Similarly, he would decrease the price per share for securities sold by approximately $.02 to $.05 below the market price before allocating the proceeds to the customers’ accounts. This improper price change was not disclosed to or authorized by the customers.”

In settling this matter, Bretton neither admitted nor denied the charges, but consented to the entry of FINRA’s findings. Regardless of whether he admits the charges, he is barred from associating with any FINRA member in any capacity.

It seems that Mr. Bretton was a bad choice for CCO at his former firm.

I was also disappointed to see that the BrokerCheck did not throw up a bigger red flag for this type of discipline. After all, this is a permanent bar. The BrokerCheck webpage for Tod Bretton just states that there are events disclosed in the Detailed Report. You have to get to the ninth page to find out that he is under a permanent bar.

I understand the difficult issues with disclosing disciplinary actions, since some may be unfounded or of little merit. Bretton got the nuclear discipline, ending his career with securities. Such a definitive and absolute result should be made more obvious.

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2 Responses to You know you’ve failed as a CCO when you get barred by FINRA

  1. Jackie May 17, 2010 at 2:44 pm #

    I dont understand how you can be certian of your what you say. Is it becuase he did not work for GOLDMAN SACHS so everyone believes what they read.

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