Ouch! Nuisance Calling Costs Small Florida Firm $20,000
In a sign that old-fashioned telephone cold-calling can be a dangerous activity for brokerage firms, the Financial Industry Regulatory Authority has pried $20,000 from a Florida firm that employs 43 registered representatives.
Boca Raton-based Dawson James Securities signed a letter of acceptance, waiver and consent on Thursday agreeing to the fine, and a censure, for letting some brokers make outbound calls to people who were registered on the Federal Trade Commission’s national Do Not Call registry.
Dawson James used cold-calling software from Gryphon Networks that blocks calls to numbers on the do-not-call list, but some employees in its New York branch “bypassed” the system and called 49 prohibited numbers over seven months in 2017 and 2018, Finra said.
Thomas W. Hands, president of the 15-year-old firm that since 2014 has paid Finra $275,000 in five other settlements over sales practice, pricing and research rule allegations, declined to comment on the settlement or its effect on the firm’s capital strength. Dawson James signed the consent order without admitting or denying the findings.
Finra’s decision to enforce its Rule 3230, which specifically prohibits outgoing calls to Do Not Call registrants, stands out at a time when compliance officials wrestle with ways to control brokers from using social media and digital tools without violating marketing proscriptions.
Finra considers violators of the Do Not Call rule, to also have defied its Rule 2010 that requires firms to observe high standards of commercial honor and just and equitable principles of trade, according to the consent letter.
New Hampshire’s Bureau of Securities Regulation also has taken up the Do Not Call cudgel. In 2015, Ameriprise Financial Services agreed to pay the state $90,000 for violating telemarketing laws because of the calls. One year earlier, Edward Jones agreed to pay $750,000 and Merrill Lynch $400,000 over similar violations.
The firms also revised their supervisory procedures to enhance compliance with their rules, according to Eric Forcier, a lawyer at the Bureau. New Hampshire has no pending investigations of Do Not Call registry violations, he said.