RedRidge and Hurt: Customer Fund Conversion Charges
RedRidge and Hurt Allegedly Failed to Establish Adequate Supervisory Procedures to Monitor and Prevent Unauthorized Wire Transfers
RedRidge and Hurt, in the time period from December 2006 through September 2014, allegedly failed to establish adequate supervisory procedures to monitor and prevent unauthorized wire transfers, according to a FINRA Letter of Acceptance, Waiver and Consent (AWC).
RedRidge and Hurt allegedly converted more than one million dollars of customer funds by falsifying letters of authorization and, thereby, effecting more than 120 unauthorized wire transfers from customer accounts to the bank account of a broker known only as EJ, the AWC notes.
RedRidge Censured and Fined and Principal Hurt Suspended and Fined
Not only were the RedRidge‘s Supervisory Control procedures unreasonable, the AWC further alleges, but in the aforementioned time period, RedRidge and Hurt allegedly failed to adequately implement the supervisory control procedures that the firm did maintain. RedRidge’s procedures required Hurt (as the Compliance Officer) to review all third-party fund transmittals made during the Relevant Period, according to the AWC.
Hurt, however, the AWC reports, allegedly failed to systematically review all third-party fund transmittals, and the reviews that Hurt did conduct were not reasonable. Even though Hurt periodically reviewed EJ’s customer account activity, including third-party wire transfers, he allegedly failed to review the letters of authorization associated with such wire transfers or any documents or reports that would have identified the contra-party for such third-party wire transfers, according to the AWC.
As a result of the aforementioned conduct, the RedRidge and Hurt allegedly violated NASD and FINRA Rules, and RedRidge has been censured and fined $60,000, while Hurt has been suspended from associating with any FINRA-registered firm in a principal capacity for a period of six months and fined $17,500.
The Peiffer Wolf Carr & Kane Investment Recovery Attorneys Often Represent Investors
The Peiffer Wolf Carr & Kane investment recovery attorneys often represent investors who lose money as a result of investment misconduct. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.
Investors who believe they lost money as a result of investment misconduct may contact the investment recovery attorneys at Peiffer Wolf Carr & Kane, Jason Kane or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at (585) 310-5140.