Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Jeffrey Tabak (Tabak), currently associated with Tjm Investments, LLC, has at least 13 disclosable events. These events include 13 regulatory events, alleging that Tabak recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on August 06, 2024.
Without admitting or denying the findings, Tabak consented to the sanctions and to the entry of findings that as his former member firm’s designated principal, he failed to establish, maintain, and enforce supervisory systems and procedures, including WSPs, reasonably designed to achieve compliance with federal securities laws and FINRA rules prohibiting market manipulation in exchange-listed and traded securities. The findings stated that Tabak was the principal responsible for establishing and maintaining the firm’s systems and procedures to detect, investigate, and address potentially manipulative trading in exchange-listed and traded securities. Tabak was also responsible for reviewing, assessing the effectiveness of, and modifying, if necessary, the firm’s exception reports designed to detect potentially manipulative activity in exchange-listed and traded securities. The firms WSPs did not reasonably describe how the firm would detect and prevent potentially manipulative trading or provide reasonable guidance to personnel responsible for the surveillance of potentially manipulative trading in exchange-listed and traded securities. The firm’s exception reports used to detect potentially manipulative trading in exchange-listed and traded securities did not contain information that a reviewer would need to assess whether the firm’s customers were engaged in potentially manipulative trading. Moreover, to the extent the firm’s exception reports identified potentially manipulative trading in exchange-listed and traded securities, Tabak failed to ensure that the activity was reasonably investigated, including by failing to require reasonable documentation of such review or investigation. Finally, Tabak failed to reasonably investigate and address potentially manipulative wash trades in exchange-listed and traded securities in an account of firm’s foreign affiliate, which maintained an omnibus account at his firm through which the affiliate’s foreign customers bought and sold securities in the U.S. markets.
FINRA BrokerCheck shows a final customer complaint on August 06, 2024.
Without admitting or denying the allegations, Tabak consented to the sanctions and to the entry of findings that as LSC’s WSPs designated principal responsible for establishing and maintaining the Firm’s systems and procedures to detect, investigate, and address potentially manipulative trading in exchange-listed and traded securities. The findings stated that Tabak was also responsible for reviewing, assessing the effectiveness of, and modifying, if necessary, the Firm’s exception reports designed to detect potentially manipulative activity in exchange-listed and traded securities. At all relevant times, the Firm’s WSPs and system for applying such procedures, and Tabak’s conduct as the principal designated as responsible under the Firm’s WSPs, were deficient in the following ways. The Firm’s WSPs, for which Tabak was responsible, did not reasonably describe how the Firm would detect and prevent potentially manipulative trading or provide reasonable guidance to personnel responsible for the surveillance of potentially manipulative trading in exchange-listed and traded securities. The WSPs did not identify the exception reports the Firm used, what conduct a reviewer should escalate, or how issues noted during the review should be documented or escalated. Additionally, the Firm’s exception reports used to detect potentially manipulative trading in exchange-listed and traded securities did not contain information that a reviewer would need to assess whether the Firm’s customers were engaged in potentially manipulative trading. For example, one exception report designed to identify potentially prearranged trading did not identify the customers, the stock symbols at issue, or other information about the trades, such as timing and venue of execution. Absent such information, a reviewer would be unable to reasonably assess whether the activity reflected on the report was potentially manipulative. Tabak knew that the Firm’s exception reports were not reasonably designed for these reasons. Further, he did not understand how exceptions were generated or what the information reflected on the reports meant. For the majority of the Relevant Period, Tabak, as the principal designated as responsible under the Firm’s WSPs, was responsible for reviewing the Firm’s exception reports for trading in exchange-listed and traded securities. However, Tabak failed to document his review of the reports or demonstrate that he in fact had conducted such reviews. Most of the exception reports generated during the Relevant Period contained no reviewer comments other than the comment, ‘report reviewed,’ which was automatically populated whenever anyone opened the exception report. To the extent the Firm’s exception reports identified potentially manipulative trading in exchange-listed and traded securities, Tabak failed to ensure that the activity was reasonably investigated, including by failing to require reasonable documentation of such review or investigation. Finally, Tabak failed to reasonably investigate and address potentially manipulative wash trades in exchange-listed and traded securities in an account of LSC’s foreign affiliate. The foreign affiliate maintained an omnibus account at LSC through which the affiliate’s foreign customers bought and sold securities in the U.S. markets.
FINRA BrokerCheck shows a final customer complaint on August 06, 2024.
Without admitting or denying the allegations, Tabak consented to the sanctions and to the entry of findings that he as LSC’s WSPs designated principal responsible for establishing and maintaining the Firm’s systems and procedures to detect, investigate, and address potentially manipulative trading in exchange-listed and traded securities. The findings stated that Tabak was also responsible for reviewing, assessing the effectiveness of, and modifying, if necessary, the Firm’s exception reports designed to detect potentially manipulative activity in exchange-listed and traded securities. The Firm’s WSPs, for which Tabak was responsible, did not reasonably describe how the Firm would detect and prevent potentially manipulative trading or provide reasonable guidance to personnel responsible for the surveillance of potentially manipulative trading in exchange-listed and traded securities. The WSPs did not identify the exception reports the Firm used, what conduct a reviewer should escalate, or how issues noted during the review should be documented or escalated. Furthermore, the Firm’s exception reports used to detect potentially manipulative trading in exchange-listed and traded securities did not contain information that a reviewer would need to assess whether the Firm’s customers were engaged in potentially manipulative trading. For example, one exception report designed to identify potentially prearranged trading did not identify the customers, the stock symbols at issue, or other information about the trades, such as timing and venue of execution. Absent such information, a reviewer would be unable to reasonably assess whether the activity reflected on the report was potentially manipulative. Tabak knew that the Firm’s exception reports were not reasonably designed for these reasons. Further, he did not understand how exceptions were generated or what the information reflected on the reports meant. In addition, for the majority of the relevant period, Tabak had sole responsibility for reviewing the Firm’s exception reports. However, Tabak failed to document his review of the reports and was unable to provide evidence demonstrating that he in fact had conducted such reviews. Most of the exception reports generated during the Relevant Period contained no reviewer comments other than the comment, ‘report reviewed,’ which was automatically populated whenever anyone opened the exception report. To the extent the Firm’s exception reports identified potentially manipulative trading in exchange-listed and traded securities, Tabak failed to ensure that the activity was reasonably investigated, including by failing to require reasonable documentation of such review or investigation. Finally, Tabak failed to reasonably investigate and address potentially manipulative wash trades in exchange-listed and traded securities in an account of LSC’s foreign affiliate. The foreign affiliate maintained an omnibus account at LSC through which the affiliate’s foreign customers bought and sold securities in the U.S. markets. The Firm’s exception reports identified thousands of potentially manipulative wash trades by a customer of LSC’s foreign affiliate (Customer A) in the stock of Customer A’s parent, but Tabak, as the principal designated as responsible under the Firm’s WSPs, did not reasonably investigate the potentially manipulative trading. As a result, Tabak violated IEX Rules 5.110 and 3.110.
FINRA BrokerCheck shows a final customer complaint on August 06, 2024.
Without admitting or denying the allegations, Tabak consented to the sanctions and to the entry of findings that he as LSC’s WSPs designated Tabak as the principal responsible for establishing and maintaining the Firm’s systems and procedures to detect, investigate, and address potentially manipulative trading in exchange-listed and traded securities. The findings stated that Tabak was also responsible for reviewing, assessing the effectiveness of, and modifying, if necessary, the Firm’s exception reports designed to detect potentially manipulative activity in exchange-listed and traded securities. During the relevant period, the Firm’s WSPs and system for applying such procedures, and Tabak’s conduct as the designated principal under the Firm’s WSPs, were deficient in the following ways. The Firm’s WSPs, for which Tabak was responsible, did not reasonably describe how the Firm would detect and prevent potentially manipulative trading or provide reasonable guidance to personnel responsible for the surveillance of potentially manipulative trading in exchange-listed and traded securities. The WSPs did not identify the exception reports the Firm used, what conduct a reviewer should escalate, or how issues noted during the review should be documented or escalated. Second, the Firm’s exception reports used to detect potentially manipulative trading in exchange-listed and traded securities did not contain information that a reviewer would need to assess whether the Firm’s customers were engaged in potentially manipulative trading. For example, one exception report designed to identify potentially prearranged trading did not identify the customers, the stock symbols at issue, or other information about the trades, such as timing and venue of execution. Absent such information, a reviewer would be unable to reasonably assess whether the activity reflected on the report was potentially manipulative. Tabak knew that the Firm’s exception reports were not reasonably designed for these reasons. Further, he did not understand how exceptions were generated or what the information reflected on the reports meant. Third, to the extent the Firm’s exception reports identified potentially manipulative trading in exchange-listed and traded securities, Tabak failed to ensure that the activity was reasonably investigated, including by failing to require reasonable documentation of such review or investigation. Finally, Tabak failed to reasonably investigate and address potentially manipulative wash trades in exchange-listed and traded securities in an account of LSC’s foreign affiliate. The foreign affiliate maintained an omnibus account at LSC through which the affiliate’s foreign customers bought and sold securities in the U.S. markets. Therefore, Tabak violated BX General Rule 9, Sections 20(a) and 1(a) and their predecessors BX Rules 3010 and 2110.
FINRA BrokerCheck shows a final customer complaint on August 06, 2024.
Without admitting or denying the allegations, Tabak consented to the sanctions and to the entry of findings that as LSC’s WSPs designated principal responsible for establishing and maintaining the Firm’s systems and procedures to detect, investigate, and address potentially manipulative trading in exchange-listed and traded securities. The findings stated that Tabak was also responsible for reviewing, assessing the effectiveness of, and modifying, if necessary, the Firm’s exception reports designed to detect potentially manipulative activity in exchange-listed and traded securities. At all relevant times, the Firm’s WSPs and system for applying such procedures, and Tabak’s conduct as the principal designated as responsible under the Firm’s WSPs, were deficient in the following ways. The Firm’s WSPs, for which Tabak was responsible, did not reasonably describe how the Firm would detect and prevent potentially manipulative trading or provide reasonable guidance to personnel responsible for the surveillance of potentially manipulative trading in exchange-listed and traded securities. The WSPs did not identify the exception reports the Firm used, what conduct a reviewer should escalate, or how issues noted during the review should be documented or escalated. Additionally, the Firm’s exception reports used to detect potentially manipulative trading in exchange-listed and traded securities did not contain information that a reviewer would need to assess whether the Firm’s customers were engaged in potentially manipulative trading. For example, one exception report designed to identify potentially prearranged trading did not identify the customers, the stock symbols at issue, or other information about the trades, such as timing and venue of execution. Absent such information, a reviewer would be unable to reasonably assess whether the activity reflected on the report was potentially manipulative. Tabak knew that the Firm’s exception reports were not reasonably designed for these reasons. Further, he did not understand how exceptions were generated or what the information reflected on the reports meant. For the majority of the Relevant Period, Tabak, as the principal designated as responsible under the Firm’s WSPs, was responsible for reviewing the Firm’s exception reports for trading in exchange-listed and traded securities. However, Tabak failed to document his review of the reports or demonstrate that he in fact had conducted such reviews. Most of the exception reports generated during the Relevant Period contained no reviewer comments other than the comment, ‘report reviewed,’ which was automatically populated whenever anyone opened the exception report. To the extent the Firm’s exception reports identified potentially manipulative trading in exchange-listed and traded securities, Tabak failed to ensure that the activity was reasonably investigated, including by failing to require reasonable documentation of such review or investigation. Finally, Tabak failed to reasonably investigate and address potentially manipulative wash trades in exchange-listed and traded securities in an account of LSC’s foreign affiliate. The foreign affiliate maintained an omnibus account at LSC through which the affiliate’s foreign customers bought and sold securities in the U.S. markets.
FINRA BrokerCheck shows a final customer complaint on August 06, 2024.
That the Firm’s exception reports were not reasonably designed for these reasons. Further, he did not understand how exceptions were generated or what the information reflected on the reports meant.\<char_lb_r>\, 8. For the majority of the Relevant Period, Tabak, as the principal designated as responsible under the Firm’s WSPs, was responsible for reviewing the Firm’s exception reports for trading in exchange-listed and traded securities. However, Tabak failed to document his review of the reports or demonstrate that he in fact had conducted such reviews. Most of the exception reports generated during the Relevant Period contained no reviewer comments other than the comment, ‘report reviewed,’ which was automatically populated whenever anyone opened the exception report. To the extent the Firm’s exception reports identified potentially manipulative trading in exchange-listed and traded securities, Tabak failed to ensure that the activity was reasonably investigated, including by failing to require reasonable documentation of such review or investigation.\<char_lb_r>\, 9. Finally, Tabak failed to reasonably investigate and address potentially manipulative wash trades in exchange-listed and traded securities in an account of LSC’s foreign affiliate. The foreign affiliate maintained an omnibus account at LSC through which the affiliate’s foreign customers bought and sold securities in the U.S. markets.
FINRA BrokerCheck shows a final customer complaint on August 06, 2024.
Without admitting or denying the allegations, Tabak consented to the sanctions and to the entry of findings that as LSC’s WSPs designated principal responsible for establishing and maintaining the Firm’s systems and procedures to detect, investigate, and address potentially manipulative trading in exchange-listed and traded securities. He was also responsible for reviewing, assessing the effectiveness of, and modifying, if necessary, the Firm’s exception reports designed to detect potentially manipulative activity in exchange-listed and traded securities. During the relevant period, the Firm’s WSPs and system for applying such procedures, and Tabak’s conduct as the designated principal under the Firm’s WSPs, were deficient in the following ways. First, the Firm’s WSPs, for which Tabak was responsible, did not reasonably describe how the Firm would detect and prevent potentially manipulative trading or provide reasonable guidance to personnel responsible for the surveillance of potentially manipulative trading in exchange-listed and traded securities. The WSPs did not identify the exception reports the Firm used, what conduct a reviewer should escalate, or how issues noted during the review should be documented or escalated. Second, the Firm’s exception reports used to detect potentially manipulative trading in exchange-listed and traded securities did not contain information that a reviewer would need to assess whether the Firm’s customers were engaged in potentially manipulative trading. For example, one exception report designed to identify potentially prearranged trading did not identify the customers, the stock symbols at issue, or other information about the trades, such as timing and venue of execution. Absent such information, a reviewer would be unable to reasonably assess whether the activity reflected on the report was potentially manipulative. Tabak knew that the Firm’s exception reports were not reasonably designed for these reasons. Further, he did not understand how exceptions were generated or what the information reflected on the reports meant. Third, to the extent the Firm’s exception reports identified potentially manipulative trading in exchange-listed and traded securities, Tabak failed to ensure that the activity was reasonably investigated, including by failing to require reasonable documentation of such review or investigation. Finally, Tabak failed to reasonably investigate and address potentially manipulative wash trades in exchange-listed and traded securities in an account of LSC’s foreign affiliate. The foreign affiliate maintained an omnibus account at LSC through which the affiliate’s foreign customers bought and sold securities in the U.S. markets.
FINRA BrokerCheck shows a final customer complaint on August 06, 2024.
Without admitting or denying the allegations, Tabak consented to the sanctions and to the entry of findings that as LSC’s WSPs designated principal responsible for establishing and maintaining the Firm’s systems and procedures to detect, investigate, and address potentially manipulative trading in exchange-listed and traded securities. He was also responsible for reviewing, assessing the effectiveness of, and modifying, if necessary, the Firm’s exception reports designed to detect potentially manipulative activity in exchange-listed and traded securities. During the relevant period, the Firm’s WSPs and system for applying such procedures, and Tabak’s conduct as the designated principal under the Firm’s WSPs, were deficient in the following ways. First, the Firm’s WSPs, for which Tabak was responsible, did not reasonably describe how the Firm would detect and prevent potentially manipulative trading or provide reasonable guidance to personnel responsible for the surveillance of potentially manipulative trading in exchange-listed and traded securities. The WSPs did not identify the exception reports the Firm used, what conduct a reviewer should escalate, or how issues noted during the review should be documented or escalated. Second, the Firm’s exception reports used to detect potentially manipulative trading in exchange-listed and traded securities did not contain information that a reviewer would need to assess whether the Firm’s customers were engaged in potentially manipulative trading. For example, one exception report designed to identify potentially prearranged trading did not identify the customers, the stock symbols at issue, or other information about the trades, such as timing and venue of execution. Absent such information, a reviewer would be unable to reasonably assess whether the activity reflected on the report was potentially manipulative. Tabak knew that the Firm’s exception reports were not reasonably designed for these reasons. Further, he did not understand how exceptions were generated or what the information reflected on the reports meant. Third, to the extent the Firm’s exception reports identified potentially manipulative trading in exchange-listed and traded securities, Tabak failed to ensure that the activity was reasonably investigated, including by failing to require reasonable documentation of such review or investigation. Finally, Tabak failed to reasonably investigate and address potentially manipulative wash trades in exchange-listed and traded securities in an account of LSC’s foreign affiliate. The foreign affiliate maintained an omnibus account at LSC through which the affiliate’s foreign customers bought and sold securities in the U.S. markets.
FINRA BrokerCheck shows a final customer complaint on August 06, 2024.
Without admitting or denying the allegations, Tabak consented to the sanctions and to the entry of findings that he as LSC’s WSPs designated Tabak as the principal responsible for establishing and maintaining the Firm’s systems and procedures to detect, investigate, and address potentially manipulative trading in exchange-listed and traded securities. He was also responsible for reviewing, assessing the effectiveness of, and modifying, if necessary, the Firm’s exception reports designed to detect potentially manipulative activity in exchange-listed and traded securities. During the relevant period, the Firm’s WSPs and system for applying such procedures, and Tabak’s conduct as the designated principal under the Firm’s WSPs, were deficient in the following ways. First, the Firm’s WSPs, for which Tabak was responsible, did not reasonably describe how the Firm would detect and prevent potentially manipulative trading or provide reasonable guidance to personnel responsible for the surveillance of potentially manipulative trading in exchange-listed and traded securities. The WSPs did not identify the exception reports the Firm used, what conduct a reviewer should escalate, or how issues noted during the review should be documented or escalated. Second, the Firm’s exception reports used to detect potentially manipulative trading in exchange-listed and traded securities did not contain information that a reviewer would need to assess whether the Firm’s customers were engaged in potentially manipulative trading. For example, one exception report designed to identify potentially prearranged trading did not identify the customers, the stock symbols at issue, or other information about the trades, such as timing and venue of execution. Absent such information, a reviewer would be unable to reasonably assess whether the activity reflected on the report was potentially manipulative. Tabak knew that the Firm’s exception reports were not reasonably designed for these reasons. Further, he did not understand how exceptions were generated or what the information reflected on the reports meant. Third, to the extent the Firm’s exception reports identified potentially manipulative trading in exchange-listed and traded securities, Tabak failed to ensure that the activity was reasonably investigated, including by failing to require reasonable documentation of such review or investigation. Finally, Tabak failed to reasonably investigate and address potentially manipulative wash trades in exchange-listed and traded securities in an account of LSC’s foreign affiliate. The foreign affiliate maintained an omnibus account at LSC through which the affiliate’s foreign customers bought and sold securities in the U.S. markets.
FINRA BrokerCheck shows a final customer complaint on July 23, 2024.
Jeffrey Tabak violated BYX Rule 5.1 in that he failed to supervise properly the activities of the Firm and to assure the Firm’s compliance with applicable securities laws and regulations and Exchange Rules prohibiting manipulative trading.
FINRA BrokerCheck shows a final customer complaint on July 23, 2024.
Jeffrey Tabak violated EDGX Rule 5.1 in that he failed to supervise properly the activities of the Firm and to assure the Firm’s compliance with applicable securities laws and regulations and Exchange Rules prohibiting manipulative trading.
FINRA BrokerCheck shows a final customer complaint on July 23, 2024.
Jeffrey Tabak violated BZX Rule 5.1 in that he failed to supervise properly the activities of the Firm and to assure the Firm’s compliance with applicable securities laws and regulations and Exchange Rules prohibiting manipulative trading.
FINRA BrokerCheck shows a final customer complaint on July 23, 2024.
Jeffrey Tabak violated EDGA Rule 5.1 in that he failed to supervise properly the activities of the Firm and to assure the Firm’s compliance with applicable securities laws and regulations and Exchange Rules prohibiting manipulative trading.
Brokers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) standard of care under the Securities Exchange Act of 1934 which establishes a ‘best interest’ standard for broker-dealers and associated persons. Reg BI applies when brokers recommend a retail investor engage in securities transaction or an investment strategy involving one or more securities. Reg BI also applies to financial advice concerning the transfer of funds and opening of accounts. Reg BI is drawn from fiduciary principles that include an obligation to act in the retail investor’s best interest and the broker is prohibited from placing their own interests ahead of the investor’s interest.
There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which requires brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations includes three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions. Next, the advisor must have a reasonable understanding of the specific retail investor’s investment profile. The customer’s profile information generally includes an investor’s financial situation and needs; investments; assets and debts; marital status; tax status; age; investment time horizon; liquidity needs; risk tolerance; investment experience; investment objectives and financial goals; and any other information the retail investor may disclose in connection with the recommendation or advice. Finally, the financial advisor must use their knowledge of both their reasonable diligence into investment options as well as their knowledge of the investor’s client specific needs to consider reasonably available investment options. Those investment options must allow the broker to determine that there is a reasonable basis that the recommendation is in the retail investor’s best interest.
Brokerage firms and advisors must also understand the features and limitations of various account types as part of meeting Reg BI’s care obligations. Firms typically offer a variety of account options and services with different trading costs, services, such as account and activity monitoring. An advisor’s recommendation as to what type of securities account to open can alter the customers’ overall costs and investment returns. The advisor must determine that the client can benefit from the type of account being recommended to be opened and in the investor’s best interest taking into account the costs, benefits, and needs of the client.
Tabak entered the securities industry in 1978. Tabak has been registered as a Broker with Tjm Investments, LLC since 2023.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.
