FINRA Slaps Houston Firm With $400,000 Fine
The Financial Industry Regulatory Authority (FINRA) slaps NEXT Financial Group, Inc., headquartered in Houston, TX with a $400,000 fine and $102,000 in restitution to investors for excessive sales charges. According to FINRA, the fine was related to an inadequate supervisory system, specifically related to reviewing the transactions of its brokers for excessive trading. One particular broker involved was Clyde Thornburg, who worked for NEXT from August 2007 to December 2009. According to FINRA he had three customer complaints that centered around his excessive trading. Ultimately, he was terminated by the firm. Additionally, FINRA claims that NEXT failed to identify or follow up on other transactions involving 13 other brokers and 39 client accounts.
NEXT Financial Group has been sanctioned or fined twice since July 2009 for supervisory neglect. The other fine last year was for $1 million, again related to the failure to properly supervise its brokers resulting in excessive trading and excessive commissions. In related FINRA action, the firm’s Chief Compliance Officer, Karen Eyster, was fined $35,000 and suspended for two months.