The Financial Industry Regulatory Authority (FINRA) today announced that it has fined Terra Nova Financial, LLC, of Chicago, $400,000 for making more than $1 million in improper soft dollar payments to or on behalf of five hedge fund managers, without following its own policies to ensure the payments were proper.
Terra Nova was also charged with failing to properly supervise its soft dollar program, failing to implement adequate supervisory procedures and failing to retain its business-related electronic instant messages. Terra Nova also failed to timely respond to FINRA's requests for productions of various documents, including emails and instant messages, thus delaying FINRA's investigation.
FINRA also sanctioned three individuals. Cleovan Jordan, the soft dollar administrator who managed Terra Nova's relationship with its hedge fund clients, was suspended from associating in any capacity with a securities firm for 30 days and fined $20,000. Joshua Teuber, who supervised the soft dollar operation, was charged with failure to properly supervise, suspended from acting in a supervisory or principal capacity for 20 days and fined $15,000. David Persenaire, the firm's Chief Compliance Officer until September 2009, was charged with failing to ensure the implementation of adequate written systems and procedures, suspended from acting in a supervisory or principal capacity for 10 days, fined $10,000 and required to take and pass a Compliance Official Qualification Exam.
As part of the settlement, Terra Nova is required to retain an independent consultant to review and enhance its policies, systems and procedures relating to its soft dollar operations.
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