The allegations read: Without admitting or denying the findings, bohack consented to the sanction and to the entry of findings that he failed to adequately supervise the brokers at his member firm's branch, including by failing to respond appropriately to red flags of widespread sales practice violations. The red flags should have been apparent even to an individual, like bohack, with no relevant prior supervisory experience at a retail brokerage firm. Bohack was the designated branch manager and supervisor of the office of supervisory jurisdiction of the firm's branch. The findings stated that in those limited instances in which bohack identified a red flag, he neither addressed the issue with the registered representative directly nor took action himself. Instead, bohack reported the issue to his supervisor, who was also the firm's president. Bohack then failed to follow up even when it appeared that no action was taken with respect to the issue that he had raised. Bohack also allowed a separate individual, who was not an officer or principal of the firm, but who had a financial interest in the firm's branch, to improperly exercise control over its operations and personnel. Finra has barred this individual from associating with any finra member for willfully violating section 10(b) of the securities exchange act of 1934 and rule 10b-5 thereunder. Bohack observed brokers engaging in patterns of in-and-out trading activity in customer accounts, sometimes within the span of a week or less. In these instances, bohack reported the information to his supervisor, but failed to take any steps to ascertain whether the brokers' recommendations to the customer had been suitable. Bohack also failed to respond appropriately to evidence of unauthorized trading by some of the brokers. The findings also stated that bohack failed to supervise the level of trading and commissions charged in customer accounts. The firm's "account daily" exception report included turnover and velocity alerts that identified potentially excessive trading. Bohack and another principal were responsible for reviewing the account daily report and trade blotter. Bohack was responsible for supervising the other principal's reviews. Both bohack and the other principal failed to adequately review these alerts. As a result, tens of thousands of trades that had triggered alerts for potentially excessive trading received no meaningful supervisory review. Bohack also failed to understand, when and how the firm's excessive-trading exception reports were triggered, and what level of trading in a customer account might, pursuant to finra rules, be considered unsuitably excessive. During bohack's on-the-record testimony with finra, bohack acknowledged that he had not fully understood his supervisory responsibilities.
