Action against Respondent, CEO of a registered broker-dealer, for alleged failure to reasonably supervise a trader.  According to the SEC, the trader participated in a fraudulent valuation scheme including by providing artificially inflated price quotes or marks for certain mortgage-backed securities to a customer in exchange for trades being sent to the broker-dealer.  The SEC alleges that Respondent knew the trader was providing these price quotes or marks to at least one customer, and failed to establish or implement policies and procedures reasonably designed to prevent the trader’s violations.  Respondent has agreed to pay a civil penalty of $40,000.

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