August 13, 2015- Loudon, Tennessee/ Boston, MA
Signator Investors, Inc. , entered into a Letter of Acceptance Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that between from May 2004 until March 2014 Signator failed to establish and maintain a reasonable supervisory system regarding the use of consolidated statements by its brokers.
Signator’s flawed system allowed brokers to enter customized values for assets and accounts held away from the firm and did not have a satisfactory way to to determine the accuracy of valuations manually entered by the brokers.
Gregory Mitchell, who was also a party to the AWC, served as Agency Compliance Specialist for Signator’s offices in Vienna, VA, and Towson, MD. Between 2009 and 2014, FINRA found that Mitchell failed to enforce the firm’s policies and procedures related to client reviews and branch audits by providing advance notice of which client files would be reviewed, as well as advance notice of unannounced branch audits, in violation of NASD Rule 3010(b) and FINRA Rule 2010.
James Glover, a Signator broker at the Towson, Maryland branch office had sold over $13 million worth of Colonial, an investment in residential and commercial real estate. Glover had prepared and issued over 300 of the faulty consolidated reports including inaccurate values for Colonial, which, due to the inadequate supervisory procedures of Signator, had gone undetected.
AWC No. 2012032782402
Signator was censured and fined $450,000.
Mitchell was fined $10,000 and suspended for seven months.
Signator and its predecessor company has been a FINRA member since 1968, is headquartered in San Antonio, Texas, and has over 1,500 brokers in 314 branch offices.
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