The Financial Industry Regulatory Authority fined a firm $37,500 for trade and books and records violations, and a broker $5,000, giving him a four-month suspension, for telling a customer he redeemed bonds rather than sold them without the customer's permission.
The violations and sanctions were detailed in FINRA's monthly report on disciplinary actions.
Deutsche Bank Securities Inc. and Mark Timothy Youngs neither admitted to, nor denied, the charges.
The bank violated the Municipal Securities Rulemaking Board's rule G-8 on record keeping, as well as its rule G-14 governing reports of sales and purchases. FINRA said.
It failed to report, within 15 minutes of execution as required, 141 trades, or 4% of its total reportable trades, between Jan. 1, 2009 and March 31, 2009 and 88 trades, or 30% of its reportable trades, between July 1, 2009 and Sept. 30, 2009.
In addition, the bank failed to report the correct time of trade in memoranda for 142 brokerage orders during the first part of 2009 and in 93 trade reports and memoranda for 91 brokerage orders during the latter part of year.
FINRA also levied fines totaling $177,500 against the bank for violations of corporate securities trade reporting. Deutsche Bank did not respond to a request for comment.
Youngs, a broker currently with Annapolis, Md.-based Coastal Equities Inc., agreed to a fine and suspension in connection with a falsified document created in July 2011, when he was employed by RBC Capital Markets in Annapolis.
FINRA found that around July 12, Youngs recommended a customer sell a Maryland muni bond and purchase a unit investment trust of international bonds. Believing his customer to have authorized the transaction, Youngs sold the bond and bought the UIT. After receiving confirmation of the transaction, the customer confronted Youngs and said he had not authorized the sale or subsequent purchase. Youngs then created and gave to the customer a document showing that the bond had been redeemed by the issuer, rather than sold.
On July 25, Youngs' manager questioned him about the account, at which point Youngs admitted to having falsified the redemption notice. RBC fired Youngs the following day. He has been employed with Coastal since August 2011.
By creating a false document, Youngs violated FINRA Rule 2010, the authority said, which requires a broker to observe high standards of commercial honor and just and equitable principles of trade. Youngs had no prior disciplinary history, according to FINRA. Youngs' suspension prevents him from associating with any FINRA member firm in all capacities, and is to last from March 4 until July 3.