February 5, 2021
The Financial Industry Regulatory Authority (FINRA) Department of Enforcement recently approved a Letter of Acceptance, Waiver and Consent (AWC) jointly submitted by Whitehall-Parker Securities, Inc. and its associated general securities principal Robert Yuloo for alleged violations of FINRA Rules 3110, 3270, and 2010.
According to the AWC, Yuloo, as Whitehall-Parker’s President, CEO, COO, and supervisory principal, was responsible for the direct supervision of the firm’s registered representatives including associated outside business activity (OBA) disclosures by its representatives, as required by the firm’s written supervisory procedures. This registered representative sold nearly $1.5 million in promissory notes relating to Woodbridge Group of Companies, LLC (Woodbridge), which is now a well-known Ponzi scheme. Although this registered representative did not seek approval to sell the notes, he disclosed Woodbridge as an OBA on multiple occasions to the firm. Despite being notified of this OBA, Yuloo did not investigate the nature of the representative’s involvement in the OBA or if selling the Woodbridge notes constituted as securities transactions. Based on the foregoing, the Yuloo and the firm violated FINRA Rules 3270 and 2010.
FINRA further alleges in the AWC that Whitehall-Parker and Yuloo failed to enforce reasonable supervisory systems to review electronic communications, in violation of FINRA Rules 3110(a) and (b) and 2010.
Without admitting or denying the allegations made against them, Yuloo and Whitehall-Parker consented to a $30,000 fine and $10,000 fine, respectively. Yuloo also consented to a two-month suspension from associating with any FINRA member in all principal capacities. Finally, Whitehall-Parker must undergo a third-party evaluation of newly adopted and implemented policies, procedures, and systems that are reasonably designed with regards to review of OBAs and electronic communications.