The AWC charged Hemingway with violating NASD Conduct Rules 3030 and FINRA Rule 2010 (and its predecessor NASD Rule 2110).

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Further, by producing and then distributing these summaries to his customers, Iola was deemed to have violated NASD Conduct Rules 2110 (for conduct before December 15, 2008), 2210(d)(1)(A) and 2210(d)(1)(B), and FINRA Rule 2010 (for conduct after December 14, 2008).

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Ultimately, the AWC alleged that Hesse had failed to reasonably supervise President Esposito and also failed to reasonably review the trades and wire transmissions directed by the Client for potentially suspicious activity and other irregularities, in violation of NASD Conduct Rules 3010 and 2110 and FINRA Rule 2010.

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Based upon the above allegations, the AWC asserted that Weiss knew or should have known that the answers provided by the two reps on the Outside Business Activity Disclosure Statements were inaccurate, resulting in his failure to properly supervise in accordance with NASD Conduct Rule 3030: Outside Business Activities of an Associated Person, which caused violations of NASD Conduct Rules 3010: Supervision and 2110: General Standards.

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Proposed rules just issued by the NASD would require variable annuities sellers to make far more disclosures to clients--including their commissions.

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The pair checked NASD regulations and discovered that there were no rules preventing this, so they created software and a network of personal computers that would simulate a giant electronic limit order book.

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