According to FINRA, Paul Eric Flesche was fined $30,000 jointly and severally with his firm and suspended from association with any FINRA member in all capacities for 30 business days for failing to supervise a registered representative handling Asia-based customers.

This case is connected to the larger Glendale Securities matter and involves Flesche's role in supervising account openings for customers based in Asia. Along with the firm's Anti-Money Laundering Compliance Officer, Flesche approved account opening documents and deposits for the representative's Asia-based customers. However, he failed to take adequate supervisory steps to address obvious red flags.

Critically, Flesche did not ask the representative basic questions about how he communicated with the customers, including whether the customers understood the representative's written communications in English. This was a significant oversight given the language barriers that likely existed with Asia-based customers.

While Flesche and the AMLCO knew that the representative had translated portions of the firm's account opening documents for the customers, they took no steps to ensure the accuracy of these translations. They also asked no questions about whether customers understood the portions of documents that were not translated. This created a serious risk that customers did not fully understand the account terms, risks, and obligations they were undertaking.

Effective supervision requires more than simply approving paperwork. When obvious red flags exist—such as customers who likely do not speak English as their primary language, translated documents of unknown accuracy, and a representative acting as intermediary for all communications—supervisors must investigate further and take steps to address the risks. Flesche's failure to do so allowed the representative to open and operate customer accounts without adequate verification of customer understanding or identification.

The National Adjudicatory Council affirmed the findings and sanctions, and Flesche has appealed to the Securities and Exchange Commission, so the sanctions are not currently in effect pending that review. The allegations that Flesche participated in the sale of restricted securities were dismissed.

This case illustrates the challenges of supervising international customer accounts and the heightened diligence required when language barriers, translated documents, and intermediary representatives are involved. Firms and supervisors must ensure that customers genuinely understand account terms regardless of language, and cannot simply rely on representatives' translations without verification.