Corinthian Is Fined By FINRA For Allowing Its CEO And CCO To Supervise Their Own Trading

As part of a settlement with the Financial Industry Regulatory Authority (FINRA), Corinthian Partners, LLC has agreed to pay a $10,000 as fine for violating regulatory rules.

Corinthian failed to develop, maintain, and implement a supervisory system, including written supervisory procedures (WSPs), reasonably intended to preclude firm executives from overseeing their own trading from March 2018 to April 2019. As a consequence, Corinthian granted the CEO and CCO the authority to monitor their own trading in accounts handled jointly. The firm violated FINRA Rules 3110 and 2010 as a result of the above.

From March 2018 to April 2019, the CEO and CCO shared client accounts and divided commissions evenly. All transactions in the accounts required supervisory permission from the CEO or CCO. According to firm data, 488 transactions were executed in those accounts.

The CEO entered and authorized the deals for two of them. Firm monitoring could not determine who entered the remaining 486 transactions, such as the CEO and CCO, and hence could not assure that they were not self-supervising trades that they had entered.

Corinthian's WSPs did not indicate the person responsible for trading reviews by name or title over that time period, and they did not delegate the CEO's or CCO's trades to a separate principle so that they were not self-supervising trades that they had placed.

Furthermore, the WSPs did not reflect the business's utilization of automated monitoring and electronic transaction review by a firm principle. Instead, the firm's WSPs featured out-of-date references to defunct manual trade blotter evaluations.

As a result, Corinthian breached FINRA Rules 3110(a) and (b), as well as 2010.

The respondent has consented to censure in addition to the $10,000 punishment.

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