The allegations read: Without admitting or denying the findings, mireles consented to the sanctions and to the entry of findings that he failed to reasonably respond to red flags, which were escalated to him, of excessive trading by a registered representative who excessively traded customers' accounts. The findings stated that mireles supervised his member firm's lower-level supervisors who reviewed certain of the firm's trade alerts and blotters, including a "high-principal solicited trade" alert. Numerous trades placed by the registered representative in all of the affected customers' accounts repeatedly appeared on that alert, which was based on a ruleset whose parameters were designed to flag solicited trades with a high principal amount. The lower-level designated supervisors reviewing trade alerts developed concerns that the registered representative was excessively trading customers' accounts and brought these concerns to mireles's attention. Mireles, however, directed the supervisor to perform only trade-by-trade assessments to review for compliance with reg bi and suitability, and not to review the series of trades that the registered representative was placing within an account for potential excessive trading. The registered representative excessively traded the customers' accounts, causing a level of trading inconsistent with the customers' investment profiles and that was not in their best interest or was not suitable. Collectively, these customers paid more than $2.2 million in total trading costs and incurred realized losses totaling approximately $2.2 million.
