FINRA fines Arive Capital Markets for violating telemarketing restrictions
Arive Capital Markets has agreed to pay a fine of $300,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
From August 2016 to June 2020, the firm failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with the suitability requirements of FINRA Rule 2111 as they pertain to excessive trading.
As a result, Arive failed to reasonably identify or address red flags of excessive trading in 12 customer accounts that caused the customers to pay a total of nearly $640,000 in commissions, costs, and margin interest. By this conduct, Arive violated FINRA Rules 3110 and 2010.
From June 2018 through February 2019, the firm failed to establish, maintain, and enforce a supervisory system, including WSPs, reasonably designed to achieve compliance with the requirements of FINRA Rule 3230 regarding telemarketing.
Between June 2018 and February 2019, the firm routinely violated the telemarketing rules. Representatives made over 60,000 outbound calls to over 20,000 telephone numbers listed on the national do-not-call registry. On at least 27 instances during the relevant period, representatives at the branch office made outbound calls to telephone numbers on the firm’s do-not-call list.
In at least 32 instances, representatives made outbound telemarketing calls before 8 a.m. or after 9 p.m. local time.
By this conduct, Arive violated FINRA Rules 3230, 3110 and 2010.
On top of the $300,000 fine, the firm has agreed to a censure and to pay restitution of $594,928.74, plus interest.