The allegations read: Nasd rules 2110, 3010: guarino failed to adequately review cmo purchases by brokers under his supervision at two branch offices of his member firm, or otherwise failed to have taken reasonable steps to ensure that the brokers were abiding by the terms identified in the disclosure document sent to customers, which stated that transaction costs for the purchase of cmo products would not exceed 3.25%. Guarino failed to detect that in 187 cmo transactions customers were being charged more than the 3.25%, thereby resulting in $41,873.47 in excessive transaction costs charged to the customers. Guarino received two sets of blotters, one encompassing all trades, and one just covering cmo transactions, and he reviewed both. Further, guarino approved the inclusion of the 3.25% maximum charge in the disclosure document and reviewed all of the cmo transactions entered by the brokers at the two branch offices to assure compliance with the firm's guidelines.
