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Massachusetts Securities Division files complaint against Cantella
By LLuvia Mares
New York, Dec. 12 - The Massachusetts Securities Division alleged in a complaint that long established brokerage firm Cantella & Co., Inc. did not maintain accurate policies and procedures for sales of structured products.
In the complaint, the office of Secretary of the Commonwealth William Galvin said that Cantella was not able to produce original evidence of compliance after being subpoenaed by the division this summer.
"Cantella & Co., Inc. could not locate original daily blotters reflecting transactions cleared through Bear Stearns for the Jan. 1 to May 6, 2006 timeframe, after presumably placing the documents in a box that was improperly labeled when it was sent off to its Iron Mountain storage facility," the complaint stated.
The division's investigation into the structured products market was prompted after a Structured Products Association report stated that products sales in the United Stated produced $64 billion in 2006, according to the division's website.
"These are rather sophisticated instruments and there was some concern that they were being sold to retail customers who did not have the requisite knowledge of what the risks were or the rewards," Brian McNiff, Massachusetts Securities Division spokesperson, told Prospect News. "And in some cases, perhaps even being sold by agents who didn't know what those were either."
The division is asking that Cantella be obligated to pay an administrative fine as well as the Enforcement Securities' investigatory costs.
McNiff said Cantella has 21 days to respond to the complaint.
Calls to Cantella & Co. were not immediately returned Wednesday.
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