US~Observer Demands Accountability of Firms with Histories of Compliance Failures
At a Glance:
The US~Observer, leveraging its proprietary Arbiter tool and ShareIntel data, uncovered massive share imbalances at five major brokerages, raising serious concerns about potential regulatory violations.- Compliance officers, contacted via phone and registered letters (three signed for, two have not appeared, though all officers were sent regular mail copies), have ignored inquiries. Is this a deliberate cover-up to protect illicit practices?
- Compliance departments are impenetrable, with phone lines leading to unmonitored voicemails or dead ends, leaving investors stranded and helpless.
- These firms, allegedly acting like untouchable God-like figures, have a history of regulatory fines for compliance failures.
- The primary company/issuer, fearing damning retaliation from these powerful firms, remains anonymous, but the US~Observer is unrelenting in exposing this misconduct and urging regulators to investigate.
The US~Observer, leveraging its proprietary Arbiter tool and
By US~Observer Staff
The US~Observer, with over 30 years of exposing misconduct, has been met with shameless defiance from compliance officers at five major brokerage firms:
J.P. Morgan Securities LLC
National Financial Services LLC
Charles Schwab & Co. Inc.
Citigroup Global Markets Inc.
UBS Securities LLC.
The US~Observer has uncovered massive share imbalances that could indicate predatory practices like naked short selling, which allegedly manipulates markets and robs investors. Despite exhaustive efforts, phone calls and registered letters these officers refused to respond. Are they brazenly violating SEC and FINRA regulations?
Their silence, coupled with inaccessible compliance channels, reeks of a calculated effort to shield alleged illicit activities.
Why It Matters
These share imbalances point to potential market manipulation, eroding investor trust and market integrity. The officers’ refusal to engage, paired with their firms’ histories of regulatory fines, exposes a culture of negligence and arrogance. These firms seemingly wield immense power to retaliate against issuers and shareholders who dare challenge them. The issuer, deeply worried about damning repercussions, has entrusted the US~Observer to shine a light on this misconduct. Investors deserve transparency, not stonewalling, from those tasked with upholding financial fairness. We urgently call on regulators to investigate these firms’ procedures and hold these officers accountable for their blatant disregard of legal obligations.
Named Officers
Below are the compliance officers of each firm, along with alleged documented failures and public criticism fueling distrust.
J.P. Morgan Securities LLC:
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• Choi’s department has ignored our inquiries, aligning with J.P. Morgan’s $151 million in SEC fines.
National Financial Services LLC:
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• Has Abramov’s oversight ignored imbalances?
• Dyer’s vague responses and current silence echo NFS’s $175,000 FINRA fine for misreporting transaction data.
Charles Schwab & Co. Inc.:
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• Nichols’ failure to explain share discrepancies aligns with Schwab’s £8.96 million FCA fine for client asset.
Citigroup Global Markets Inc.
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• Richardson’s refusal to address share gaps aligns with Citigroup’s $136 million fine for data management failures.
UBS Securities LLC
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• DiMarco’s refusal to engage follows UBS’s $14.5 million FinCEN fine for AML failures.
• Francomano’s silence aligns with UBS’s compliance woes.
Untouchable Gatekeepers
These officers, backed by their firms’ vast resources, act as untouchable gatekeepers, are alleged to be ignoring their duty to investors/issuers. Their firms’ histories – J.P. Morgan’s $151 million for disclosure issues, NFS’s $175,000 for reporting errors, Schwab’s $187 million for misleading clients, Citigroup’s $136 million for control failures, and UBS’s $14.5 million for AML lapses reveal a pattern of defiance that their current silence only amplifies.
Regulations Ignored
The compliance officers have ignored our and issuer inquiries, allegedly violating key regulations cited in the US~Observer’s letters:
- SEC Rule 15c3-3: Requires broker-dealers to maintain sufficient reserves to protect customer assets, including accurate records of share positions to prevent imbalances.
- SEC Rule 17a-3: Mandates broker-dealers to keep detailed records of securities transactions and positions, which should be accessible to issuers upon request.
- SEC Regulation SHO, Rule 204: Requires broker-dealers to close out fail-to-deliver positions within 13 days for threshold securities, with reporting obligations to ensure transparency.
- FINRA Rule 3110(b)(4): Mandates a supervisory system to ensure compliance with securities laws, including responding to legitimate inquiries about share positions.
- FINRA Rule 4513: Requires accurate and non-misleading communications with the public, including issuers, which these officers have failed to provide.
By ignoring these inquiries, these officers are alleged to have violated their duty to maintain accurate records, supervise activities, and provide transparency to issuers. Their refusal to disclose shareholder positions or redacted records suggests they are protecting potentially illicit short-selling practices, leaving regulators to question what they are hiding.
Inaccessible Compliance Channels
Were the US~Observer’s attempts to contact these firms met with alleged deliberate obstruction? Phone numbers listed at FINRA and FINRA Brokercheck led to unmonitored voicemails or disconnected lines. One firm’s “media number” admitted messages are “never checked,” directing to another dead-end number. Registered letters have been ignored, violating the 10-day requested response deadline. Is this fortress of inaccessibility a calculated tactic to shield officers from scrutiny, leaving investors stranded and helpless?
Potential Legal Action
These imbalances could draw attention from plaintiff law firms known for securities class actions.
Time to Act Now
The US~Observer demands that these officers break their silence and address these issues.
We urge regulators, including the SEC and FINRA, to investigate these firms’ procedures and hold these officers accountable for their flagrant violations. Investors should flood their brokers with demands for transparency and share this investigation on X to expose this evasion. If you’ve faced similar stonewalling, contact the US~Observer at 602-960-4609. Visit US~Observer.com for updates.
