The market watchdog has also ordered the company to reimburse over $353,000 in compensation, as well as interest, to customers who received unfair prices.
Suspending head trader Jose Luis Turnes for six months and fining $75,000, the US regulatory agency asked StateTrust chief compliance officer Jeffrey Cimbal to pay $20,000 and sanctioned him for five months for failing to supervise Turnes.
A total of 563 transactions were charged excessive markups/markdowns to customers, in which 227 cases, the markups or markdowns exceeded 5%.
StateTrust, acting through Turnes charged excessive markups and markdowns on 85 transactions, ranging from eight percent to over 23%, claimed FINRA.
FINRA executive vice president and market regulation head Thomas Gira said, "StateTrust charged customers unfair prices in fraudulent corporate fixed income transactions, and the firm and the Chief Compliance Officer failed to properly supervise its head trader, who priced these transactions."
Without admitting or denying charges, StateTrust, Turnes and Cimbal consented to FINRA’s findings.
