ViewTrade Securities, Inc.
The findings stated that the firm’s written procedures failed to identify any steps the firm would take to verify that it actually received and reviewed duplicate statements for each disclosed outside brokerage account.
The procedures also failed to provide guidance regarding how the firm would detect and investigate potential securities violations and did not impose a deadline for reviews to be completed. In practice, the firm did not have a reasonably designed process to ensure that it timely received and reviewed duplicate statements for all disclosed outside accounts.
With respect to the receipt of account statements, the firm maintained a tracking spreadsheet, but certain statements were not recorded as having been received, and the firm did not timely follow-up on the missing statements. As a result, the firm failed to timely obtain account statements for certain outside brokerage accounts disclosed by the firm’s associated persons.
The firm also failed to timely review certain account statements that it received, including some statements that were not reviewed for more than six months after the firm received them.
In addition, the firm’s system to review duplicate statements was not reasonably designed. The firm’s manual review of duplicate statements was performed by a single supervisor, which was unreasonable given the volume of monthly statements subject to review.
Further, the manual review did not facilitate identification of patterns of activity over time or across accounts. The firm’s review of account statements was also unreasonable because it did not review for certain potential securities violations such as brokers trading ahead of customer orders or front running.
