← Broker database 2025-06-16
Nicholas Joseph Lorenzo Fined $5,000 and Suspended Nine Months for Surveillance Supervision Failures
According to FINRA, Nicholas Joseph Lorenzo was fined $5,000, suspended from association with any FINRA member in any principal capacity for nine months, and required to requalify by examination as a principal.
The findings revealed that as head of his member firm's trading compliance group, Lorenzo failed to perform certain supervisory responsibilities by delegating and assigning the review of surveillance reports to group members without reasonably following through to confirm the reviews were being conducted.
Lorenzo assigned surveillance reports to group members without documenting those assignments in writing. As a result, over time, the firm could not determine which members were responsible for reviewing particular reports. Lorenzo also failed to evaluate whether group members understood how to review reports for red flags of potentially suspicious or violative trading.
Lorenzo did not take reasonable steps to assess the quality of the reviews his group performed, nor did he verify that the group was escalating problematic issues as required by the firm's procedures.
When a group member informed Lorenzo that he had fallen behind in reviewing two types of exception reports, Lorenzo assumed without further inquiry that the issue was limited to those two report types for the previous month only. He did not review system audit trails that would have shown whether reports had been accessed and reviewed. Consequently, Lorenzo failed to detect that the trading compliance group had failed to review a significant number of assigned surveillance reports for extended periods of time.
The suspension is in effect from July 21, 2025, through April 20, 2026. This case emphasizes that supervisors cannot simply delegate responsibilities and assume they are being completed; reasonable oversight and verification are essential components of effective supervision.