American Stocks Day-Trading Firm Monex Fined $1.3 Million for Not Registering Mexican Personnel
Unregistered employees conducted business on Monex's behalf in the US, including collecting client information needed to open accounts, making investment
The American Financial Industry Regulatory Authority (FINRA) announced today that it has ordered Monex Securities Inc. to pay $1,100,000 obtained by unregistered foreign individuals who sold securities on the firm’s behalf.
The financial watchdog also fined the online stocks day-trading broker Monex (no relation to the Japanese group) $175,000 for failing to register the foreign representatives and for related supervisory deficiencies over a period of two and a half years. Additionally, Monex’s President and Chief Compliance Officer Jorge Martin Ramos Landero was suspended from acting in a principal capacity for 45 days and fined $15,000.
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FINRA’s rules require any individual engaged in the securities business to be registered and pass a qualification examination. It found that Ramos executed an agreement on behalf of Monex, with its parent company in Mexico, that permitted numerous employees to conduct business on Monex’s behalf by, among other things, collecting client information needed to open accounts, making investment recommendations to clients and transmitting orders. None of these individuals, however, were registered in any capacity.
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This case is important for all online trading firms operating in the US, including forex brokers, as it sets very clear limits as to what non-US registered personnel might do. Collecting client information and transmitting orders are not necessarily activities all brokers might see as requiring an employee to be registered for, but the regulator now clearly does.
Brad Bennett, FINRA executive vice president and head of enforcement, said, “It is imperative that firms such as Monex are diligent in ensuring that all individuals who are acting as representatives of the firm are properly registered and supervised. When individuals are permitted by a firm to sell securities on its behalf without being registered and supervised, investors are at risk because of the lack of regulatory oversight.”
Monex and Ramos neither admitted nor denied the charges but consented to the entry of FINRA’s findings.
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Instead of objecting to the introduction of an FTT, I think the UK government would be far more intelligent if they joined in. With financial transactions in the UK running at over £1.7 quadrillion a year (conservative estimate, since it doesn’t include $179.5 trillion handled by ICAP Plc in 2012), a 0.1% tax could generate enough revenue for the UK to scrap income tax, corporation tax and VAT completely. Indeed, you wouldn’t even need 0.1% – 0.03% would be enough. If you can find anyone who would not rather live in a country where there was no income tax, corporation… Read more »
In that case, the question would be how much of the City business will migrate to NY, HK or SG. Where ever they introduced a ftt volumes fell dramatically and revenues were only a fraction of the number on which politicians sold the tax on.