FINRA’s Department of Enforcement investigated Kolinofsky’s alleged misconduct and found he failed to appropriately supervise the sales practices of one of his registered representative’s who recommended investments outside of Ameriprise Financial (also referred to as “selling away”). Kolinofsky was charged with supervising this broker’s activity regardless of whether the broker engaged in conduct within the firm or outside of the firm.
According to FINRA, the rogue broker participated in the sale of approximately $1.72 million of preferred shares issued by the biopharmaceutical company BioChemics Inc. (“BioChemics”) to nine Ameriprise Financial customers and four Ameriprise Financial registered representatives. FINRA alleges the broker did not provide written notice to Ameriprise Financial that he was participating in these recommendations. To make matters worse, Kolinofsky personally invested $10,000 in BioChemics without first providing notice to Ameriprise Financial.
Based upon the foregoing misconduct, FINRA alleged Kolinofsky violated several financial industry rules and regulations, including NASD Rules 3010(a) and (b), 3040(b), and FINRA Rule 2010. Specifically, under NASD Rule 3010, a brokerage firm owes a duty to all of its clients to monitor and supervise its employees properly. The rule states: “[e]ach member shall establish and maintain a system to supervise the activities of each registered representative…that is reasonably designed to achieve compliance with applicable securities laws and regulations…”
Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. If you suffered investment damage investing in BioChemics while holding an account with Ameriprise Financial, you may be eligible to participate in a FINRA arbitration proceeding to recoup your losses. Please complete our contact below or contact one of our attorneys at (800) 627-2179.