FINRA Slaps Lincoln Financial for Major Security Stumble

According to press reports, Lincoln Financial has been allowing its brokers to access confidential customer information over the Internet, using any browser, without security software. It doesn't take much effort to figure out that this is not a good idea, but the fine of $600,000 might drive the point home.

Arbitration Award Forces Closing of B-D

QA3 Financial Corp, a independent broker dealer, announced that it was closing its doors next week. According to InvestmentNews.com, the decision came as a result of an arbitration award against the firm. If true, the firm didn't have much choice - an arbitration award is a hit on net capital. If a firm's net capital falls too low, it must close, and that appears to be the case here.

The firm has been caught up in the Regulation D frenzy, where investors are suing their brokers over failed investments in private placements. According to InvestmentNews, QA3 has been in suits over two deals, Medical Capital and Provident Royalties. Both companies face fraud charges from the SEC, and investors have sued the brokerage firms for selling the security, despite the fact that fraud charges have not been brought against the broker dealers.

More...