Frederick Phelan Suspended by FINRA Over Alleged MSRB Rule Violations
Frederick Phelan (CRD #: 5838146), a broker formerly registered with Drexel Hamilton, has been suspended by FINRA, according to his BrokerCheck record, accessed on December 5, 2024. If you have questions about his alleged conduct as a broker, keep reading.
FINRA Suspension
According to a Letter of Acceptance, Waiver, & Consent (AWC) filed on November 18, 2024, brokerage firm Drexel Hamilton allegedly participated in primary offerings of municipal bonds from January 2016 through August 2018.
During this time, the firm allegedly submitted at least 572 orders on behalf of other brokerage firms during retail order periods without a basis for designating these orders as retail. The firm allegedly submitted orders with zip codes which made it appear that the orders qualified for submission during these periods, but that were not associated with a retail customer.
As a broker at Drexel Hamilton, Frederick Phelan allegedly submitted 46 of these order tickets.
The firm allegedly also submitted at least 44 orders during a retail order period that exceeded the $1 million per order maximum set by the issuer and split them to evade this limit. The AWC further alleged that the firm failed to maintain a system of supervision reasonably designed to ensure compliance with the retail period eligibility criteria between January 2016 and December 2022.
The AWC concluded that these allegations constituted violations of MSRB Rules G-11(k) and G-17 on the part of Drexel Hamilton and Frederick Phelan, and violation of MSRB Rule G-27 on the part of the firm.
MSRB Rules
MSRB Rules G-11(k) defines the required disclosures relating to retail order periods for dealers of primary offerings of municipal securities.
MSRB Rule G-17 requires brokers, dealers, and municipal securities dealers and advisors to engage in fair dealing and prohibits them from engaging in unfair and deceptive practices.
MSRB G-27 requires firms to establish supervisory systems to ensure their compliance with securities regulations.
Sanctions
Drexel Hamilton consented to the following sanctions:
- Censure by FINRA
- $300,000 fine
- Disgorgement of $837,353
Frederick Phelan consented to the following sanctions:
- 4-month suspension from associating with FINRA members
- $20,000 fine
His suspension began on December 2, 2024, and will end on April 1, 2025.
You can read the full AWC here.
Background Information
Frederick Phelan has passed the following exams:
- Securities Industry Essentials Examination – SIE
- General Securities Representative Examination – Series 7
- Uniform Combined State Law Examination – Series 66
He previously worked for Drexel Hamilton (CRD#:143570).
Kurta Law Can Help
If you worked with Frederick Phelan and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.
For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm that exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.