From at least March 2023 to July 2023, a TIS registered representative (Representative A) engaged in improper cancel and rebill activity when he canceled trades he placed in his personal TIS brokerage account and later rebilled them to certain of his customers’ brokerage accounts, without the customers’ knowledge or authorization, causing those customers to incur significant losses. TIS failed to reasonably identify and investigate red flags of Representative A’s improper cancel and rebill activity.

Unit Investment Trusts (UITs) offer investors the opportunity to invest in a fixed portfolio of securities for a specified term. A recommendation to sell a UIT early causes the customer to forego part of the benefit of the investment for which the customer has already paid. From January 2018 to October 14, 2024, American Portfolios failed to reasonably supervise its registered representatives’ recommendations to sell UITs before maturity to achieve compliance with FINRA Rule 2111 and, beginning June 30, 2020, Regulation Best Interest (“Reg BI”).