As for the remaining 30 deposits, although the compliance officer submitted a pre-clearance form for each of them to the firm, the forms were incomplete, lacking specific details about her family member’s acquisition of the shares and her family member’s relationship, if any, to the issuer, the filing said.
Additionally, First Manhattan’s system to detect suspicious trading in microcap securities only analyzed transactions larger than 50 million shares. The compliance officer’s family member deposited large blocks of microcap securities, but never more than 50 million shares, and then liquidated the position shortly thereafter and transferred out the proceeds, Finra said