According to FINRA, Ravid Gold was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for 30 days for circumventing his member firm's policies regarding cross trades, specifically the requirement to obtain prior written customer consent. Gold's conduct was particularly concerning because he was the firm's designated principal responsible for supervising fixed income transactions, and he deliberately structured transactions to evade firm requirements he knew applied.

Cross trades occur when a broker facilitates a transaction between two of the firm's customers, with one customer selling and another buying the same security. Because the broker represents both sides of the transaction, there is potential for conflicts of interest, and rules require obtaining written customer consent. Gold inquired with firm compliance personnel about how to conduct cross trades and was explicitly informed that written customer consent would be required. He also annually certified in writing that he understood and would comply with the firm's written supervisory procedures.

To evade the consent requirement, Gold engaged in prearranged trade sets with a counterparty broker-dealer that accomplished the same purpose as cross trades but avoided the firm's oversight. Gold would identify firm customers needing to liquidate corporate bonds and other firm customers needing to purchase the same bonds. He then arranged for the bonds to be sold to the counterparty with a promise to repurchase them later. After repurchasing the bonds, Gold sold them to the firm customers who needed to purchase them. This roundabout process achieved the same result as a cross trade but was deliberately structured to avoid obtaining required written customer consent.

Gold's conduct is particularly troubling because he held a supervisory position and was specifically responsible for overseeing fixed income transactions for compliance. His willingness to deliberately circumvent firm policies raises serious questions about his integrity and fitness for a supervisory role. For investors, this case highlights the importance of the protections provided by cross trade consent requirements. When brokers facilitate transactions between their own customers, there are inherent conflicts—the broker may be motivated to complete the trade even if the terms aren't optimal for one or both customers. Written consent requirements ensure customers understand the nature of the transaction and agree to it. Investors should be cautious when transactions seem to involve other customers of the same firm and should ask questions about how prices are determined in such situations.