FINRA suspended BMA Securities, Inc. Chief Compliance Officer Dudley Muth of Redondo Beach, California and fined him $20,000 for failing to establish, maintain and implement adequate supervisory systems and written supervisory procedures (WSPs) to comply with the federal Securities Act. Muth's fine and suspension comes on the heels of BMA Securities President and owner Burt Martin Arnold's own suspension.
According to the report, Muth also failed to establish and implement an adequate anti-money laundering (AML) program and, accordingly, failed to investigate several red flags that should have been signs of suspicious activity. For instance, BMA accounts deposited and sold over 71 million shares of a thinly traded security that FINRA deemed "unregistered," and allegedly traded the shares amongst themselves millions of times.
The investigation states that 10 accounts related by either family ties or by having the same business address repeatedly traded shares amongst themselves.
FINRA found that due to inadequate supervisory and AML systems, BMA failed to detect the red flags posed by customers repeatedly transacting with each other and approved the sale, concluding that the customers were not acting as a group. After review, FINRA deemed the customers' actions an "obvious coordination of efforts and possible control relationship."
If you have invested with BMA Securities or with another firm whose inadequate supervisory or anti-money laundering programs have allowed suspicious activity, such as stock manipulation, excessive trading or even churning, to harm your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.