According to FINRA, Ecoban Securities Corporation was censured and fined $40,000 for failing to establish and maintain adequate supervisory systems and written supervisory procedures across multiple areas of compliance.

The firm was found in violation of several regulatory requirements. First, Ecoban failed to supervise representatives' use of non-firm email for business communications and failed to comply with recordkeeping obligations. The firm's procedures did not provide adequate guidance on how business emails would be captured and reviewed, resulting in some representatives' securities business communications going unreviewed and unpreserved. Second, the firm failed to establish a reasonable supervisory system for outside brokerage accounts. The firm did not collect duplicate statements from outside brokerage accounts for six representatives, preventing it from reviewing for unacceptable trading practices such as insider trading and front running.

Additionally, Ecoban failed to properly supervise outside business activities (OBAs) and private securities transactions. The firm received only verbal notice from representatives about these activities during onboarding but did not obtain written submissions or conduct proper evaluations. The firm also failed to distribute its restricted product list to all representatives and omitted a private offering from the list despite the firm's participation in it.

Furthermore, the firm failed to have reasonable procedures regarding supervisory control testing and CEO annual certification as required under FINRA Rule 3120(a). The firm did not test or report to senior management on its supervisory controls, and the CEO did not prepare required annual certifications. Investors should understand that these supervisory failures create risks of misconduct going undetected. Proper supervision, including email review, outside account monitoring, and OBA oversight, protects investors from conflicts of interest and unsuitable recommendations.