Berkshire Global Advisors LP has agreed to pay a fine of a $100,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

From October 2019 through the present, Berkshire failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to supervise outside brokerage accounts.

Berkshire’s WSPs required associated persons to obtain prior written consent from the firm before opening outside brokerage accounts with other member firms and also required the firm to obtain and review duplicate statements for all disclosed outside brokerage accounts. Berkshire’s WSPs failed, however, 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 WSPs also failed to provide guidance on how the firm would detect and investigate potential securities-related violations.

In practice, Berkshire did not have a reasonably designed process to ensure that the firm had up-to-date records of outside brokerage accounts maintained by its associated persons or that the firm received duplicate statements for each disclosed outside account.

Although the firm required that its associated persons submit annual certifications disclosing their outside brokerage accounts, the firm had no system in place to confirm it received all required certifications.

As of January 2021, more than half of the firm’s associated persons were maintaining one or more outside brokerage accounts that had not been disclosed to the firm.

In addition, the firm maintained a list of outside brokerage accounts but did not regularly reconcile the list against the duplicate statements received by the firm. The firm had no system in place to notify associated persons or their supervisors that statements were missing and had no procedures for following up on missing statements.

Additionally, the firm’s system to review the account statements it obtained was not reasonably designed. From October 2019 through August 2023, the firm’s manual review of hundreds of monthly account statements was performed by a single individual, 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.

Additionally, although the firm attempted to identify trades in securities that appeared on the firm’s watch list, there were multiple instances of associated persons buying or selling watch list securities in disclosed outside brokerage accounts that were not detected or subject to further investigation by the firm given the firm’s unreasonable manual review.

Therefore, Berkshire violated FINRA Rules 3110 and 2010.

On top of the $100,000 fine, the firm has agreed to a censure and an undertaking that a member of Berkshire’s senior management who is a registered principal of the firm shall certify in writing that, as of the date of the certification, the firm has remediated the issues and implemented a supervisory

system, including WSPs, reasonably designed to achieve compliance with FINRA Rule 3110(a), (b), and (d).

Berkshire has been a FINRA member since May 2003. Berkshire’s headquarters is located in New York, New York. The firm currently has 36 registered representatives and three branch locations. The firm offers mergers and acquisitions and strategic advisory services.