Arive Capital Markets has agreed to pay a $300,000 fine as 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 system of oversight, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with the suitability requirements of FINRA Rule 2111 , regarding excessive trading.
As a result, Arive failed to identify or reasonably address red flags of excessive trading in 12 customer accounts that caused customers to pay a total of nearly $640,000 in fees, costs and margin interest. By this conduct, Arive violated FINRA Rules 3110 and 2010.
From June 2018 to 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 relating to telemarketing.
Between June 2018 and February 2019, the company systematically violated telemarketing rules. Agents made more than 60,000 outbound calls to more than 20,000 phone numbers listed in the national do-not-call registry. On at least 27 occasions during the relevant period, branch representatives made outbound calls to telephone numbers on the company’s do-not-call list.
In at least 32 cases, 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.
In addition to the $300,000 fine, the company agreed to a reprimand and to pay $594,928.74 in restitution, plus interest.