FINRA Suspends John Wallin for Alleged Failure to Implement AML Program
John Wallin (CRD #: 6000899), a broker registered with SprinkleBrokerage, was suspended by FINRA in a principal capacity, according to his BrokerCheck record, accessed on May 17, 2023. Read on to learn more about his alleged conduct as a broker.
FINRA Suspension
On April 27, 2023, John Wallin consented to the entry of findings that he and his firm, SprinkleBrokerage, allegedly failed to implement a reasonable anti-money laundering (AML) program.
Additionally, they allegedly failed to update SprinkleBrokerage’s Uniform Application for Broker-Dealer Registration (Form BD) to reflect that the firm had moved to a new location.
Alleged Failure to Develop AML Policies
According to a Letter of Acceptance, Waiver & Consent (AWC), SprinkleBrokerage and CEO John Wallin allegedly failed to develop and implement an AML program starting in at least September 2020.
Among other AML procedures, the firm allegedly failed to establish appropriate risk-based procedures for conducting ongoing due diligence on client accounts.
Specifically, the firm allegedly failed to monitor the activities of certain clients, including “pre-IPO funds” which solicited investments from retail investors to acquire shares of companies prior to their initial public offerings (IPOs).
Further, the firm’s AML program was allegedly not reasonably designed to detect and report suspicious activity. The AWC alleges that the firm’s AML procedures included a list of red flags that were not tailored to the risks posed by pre-IPO funds, for example.
John Wallin also allegedly failed to initiate AML investigations into these funds’ activity after SprinkleBrokerage’s clearing firms expressed concerns about them.
Alleged Failure to Update Form BD
In February 2020, SprinkleBrokerage allegedly ceased operations at its Jersey City, New Jersey location listed as its sole location on its Form BD. It allegedly then began operating out of a location in Sweden.
On July 16, 2020, John Wallin allegedly filed an amended Form BD that continued to incorrectly list the firm’s New Jersey location as its only location. He allegedly filed an amended Form BD on December 16, 2022, accurately listing the firm’s headquarters as being in San Diego, California, where the firm had recently relocated.
The AWC concludes that these allegations constitute violations of FINRA Rules 3310, 2010, 1122, and Article IV, Section 1(c) of FINRA’s By-Laws by John Wallin and SprinkleBrokerage.
FINRA Rule 3310
FINRA Rule 3310 requires firms to establish an anti-money laundering program to maintain compliance with the Bank Secrecy Act. This includes developing risk-based procedures tailored to the firm’s clientele and conducting ongoing monitoring of their transactions.
FINRA Rule 2010
FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.
FINRA Rule 1122
FINRA Rule 1122 requires brokers to keep their membership and registration documentation up-to-date and to correct any inaccuracies or misleading information in a timely manner.
Article IV of FINRA’s By-Laws
Article IV, Section 1(c) of FINRA’s By-Laws requires firms to keep their membership application up to date at all times and to amend it within 30 days of receiving new information requiring an amendment.
Sanctions
John Wallin consented to the following sanctions:
- $10,000 fine
- 5-month suspension from associating with FINRA members in a principal capacity
- 10 hours of continuing education regarding AML and/or supervisory responsibilities prior to reassociating with any FINRA member in a principal capacity
His suspension began on May 15, 2023, and will end on October 14, 2023.
SprinkleBrokerage also consented to the following sanctions:
- Censure
- $15,000 fine
- Undertaking to remediate the issues alleged by the AWC within 180 of the notice of the acceptance of the AWC
You can read a copy of the AWC here.
Background Information
John Wallin has passed the following exams:
- Series 63 – Uniform Securities Agent State Law Examination
- SIE – Securities Industry Essentials Examination
- Series 7 – General Securities Representative Examination
- Series 14 – Compliance Officer Examination
- Series 4 – Registered Options Principal Examination
- Series 24 – General Securities Principal Examination
John Wallin is a registered broker in Arkansas, Illinois, and New Jersey.
He has also worked for Equinox Securities (CRD#:145790).
Kurta Law Can Help
If you worked with John Wallin 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 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.
Loading...
Reload document 
Open in new tab