Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Timothy Hendricks (Hendricks), previously associated with X-change Financial Access, LLC, has at least one disclosable event. These events include one tax lien, alleging that Hendricks recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on April 24, 2024.
On April 24, 2024, NFA’s Committee issued a Complaint against X-Change Financial Access LLC (XFA), Timothy F. Hendricks (Hendricks), and Peter G. Scheffler (Scheffler). The complaint charges XFA with failing to keep full, complete, and systematic records of all transactions relating to the firm’s business of dealing in commodity interests and maintain all pre-trade communications. The complaint also alleges that XFA allowed unregistered individuals to act as Associated Persons without being registered in such capacity and as NFA associates. The complaint further alleges that the firm, Hendricks and Scheffler failed to supervise. Without a valid reason or seeking regulatory guidance, Scheffler participated in a decision with Hendricks to use order tickets that did not contain all the required information to satisfy regulatory relief provided by the CFTC during the COVID pandemic (COVID relief). This approach was also insufficient because, as previously alleged, XFA’s order tickets often lacked basic required information (e.g., full account number), making it difficult to use them to reconstruct trades. Similarly, Hendricks, who is a managing partner of XFA and Co-CEO of XFA’s Futures Execution Division (FED), failed to fulfill his supervisory obligations at the firm. Hendricks failed to ensure the firm maintained full, complete, and systematic records related to its order handling process. Additionally, Hendricks’ approval to use order tickets without all required information to comply with the COVID relief illustrates another significant supervisory shortcoming on his part.