Hinman Au Suspended by FINRA Over Alleged Failure to Supervise
Hinman Au (CRD #: 2243462), a broker registered with MM Global Securities, has been suspended by FINRA, according to his BrokerCheck record, accessed on January 11, 2023. If you have questions about his alleged conduct as a broker, keep reading.
On November 11, 2022, Hinman Au consented to the entry of findings that, as MM Global Securities’ Anti-Money Laundering Compliance Officer, he allegedly failed to establish and implement an anti-money laundering (AML) compliance program reasonably designed to identify and report suspicious activity.
Alleged Failure to Supervise
A Letter of Acceptance, Waiver & Consent (AWC) alleges that Hinman Au failed to implement an AML compliance program tailored to the firm’s business during a period spanning from at least January 2019 to June 2020.
Notably, the AWC alleges that the firm did not use automated tools to detect suspicious activity between January and October 2019, instead relying almost entirely on manual reviews of the daily trade blotter, which was allegedly unreasonable given the number and complexity of executed trades.
Further, Hinman Au allegedly failed to detect and investigate potential money laundering activities. For example, the AWC alleges that he failed to investigate hundreds of potential matched orders, wherein firm clients placed buy and sell orders in a security at the same time for the same limit price. Matched orders, particularly in large quantities, may be used to artificially inflate the trading activity in a security.
Hinman Au allegedly also failed to establish procedures to reasonably prevent potentially manipulative transactions. The firm’s procedures allegedly did not describe the types of market manipulation to be detected or what factors to monitor. Once again, Hinman Au allegedly relied on manual review of the daily trade blotter to detect market manipulation.
The AWC alleges that these failures caused Hinman Au to fail to identify potential market manipulation, and that he failed to reasonably address this possible manipulation after FINRA brought it to his attention.
Additionally, Hinman Au allegedly failed to implement the firm’s Customer Identification Program from at least October 2017 to April 2019, specifically with regard to the firm’s retail and institutional clients in foreign jurisdictions.
The AWC also alleges that Hinman Au used WeChat instant messages to communicate with another firm-associated individual about securities-related business between November 2018 and August 2019.
He allegedly also used his personal email on at least 25 occasions to communicate with another brokerage firm about referring potential investors in a company’s initial public offering to this other firm.
The AWC concluded that these allegations constituted violations of FINRA Rules 3310(a) and (b), 4511, and 2010.
FINRA Rule 3110
FINRA Rules 3110(a) and (b) require that firms establish systems of supervision over their employees in order to detect and prevent violations of securities regulations, including by establishing Written Supervisory Procedures (WSPs).
FINRA Rule 4511
FINRA Rule 4511 requires that firms maintain accurate books and records.
FINRA Rule 2010
FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.
Hinman Au consented to the following sanctions:
- $20,000 fine
- 45-calendar day suspension in all capacities, followed by an 18-month suspension in all principal capacities
- Requirement to requalify as a principal
His first suspension began on December 5, 2022, and will end on January 18, 2023. His suspension from acting as a principal will begin on January 19, 2023, and will end on July 18, 2024.
You can read a copy of the AWC here.
Hinman Au has passed the following exams:
- Series 66 – Uniform Combined State Law Examination
- Series 63 – Uniform Securities Agent State Law Examination
- Series 99TO – Operations Professional Examination
- SIE – Securities Industry Essentials Examination
- Series 79 – Investment Banking Registered Representative Examination
- Series 7 – General Securities Representative Examination
- Series 14 – Compliance Officer Examination
- Series 28 – Introducing Broker/Dealer Financial Operations Principal Examination
- Series 4 – Registered Options Principal Examination
- Series 8 – General Securities Sales Supervisor Examination (Options Module & General Module)
- Series 24 – General Securities Principal Examination
Hinman Au is a registered broker in New York and Texas.
He has also worked for the following firms:
- Multivista Securities (CRD#:175024)
- Traderfield Securities (CRD#:20130)
- PrimeVest Financial Services (CRD#:15340)
- TD Waterhouse Investor Services (CRD#:7870)
- Charles Schwab & Company (CRD#:5393)
- Republic Financial Services Corporation (CRD#:38293)
- Essex National Securities (CRD#:25454)
- Equico Securities (CRD#:6627)
- The Equitable Life Assurance Society of the United States (CRD#:4039)
Kurta Law Can Help
If you worked with Hinman Au and you have concerns about your investments, please contact us today at 877-600-0098 or firstname.lastname@example.org 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 and 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.