Securities Lawyers Blog
Supervisor Irving Burstein (Burstein) has settled charges brought by the Financial Industry Regulatory Authority (FINRA) by accepting a one-year bar from the securities industry. FINRA’s allegations concerned Burstein’s activities from March 2007, until July 2011, where Burstein, as Chief Compliance Officer at NSM Securities, Inc. (NSM) failed to supervise the activities of NSM’s registered representatives and also failed to implement and enforce the firm’s Written Supervisory Procedures.
Burstein first became associated with a member firm in 1988, when he joined Stuart, Coleman & Co. Thereafter, Burstein became licensed as a registered representative of at least 15 other brokerage firms including Aura Financial Services, Inc., Pointe Capital, LLC, Legend Securities, Inc., and R.M. Stark & Co., Inc.
According to FINRA, NSM’s business model is to solicit high net worth individuals of Indian descent and then engage in a highly active trading strategy in their accounts involving only a few securities. FINRA alleged that many NSM customer accounts were excessively traded in order to generate large fees for NSM registered representatives and the firm. FINRA found that Burstein, as a supervisor, failed to supervise the activities of the firm’s registered representatives and failed to implement and enforce the firm’s written supervisory procedures. FINRA alleged that NSM, through Burstein’s conduct, helped to create a “culture of noncompliance at NSM that resulted in the rampant churning of customer accounts, unsuitable recommendations, unauthorized trading, and significant customer harm.”