FINRA Fines Firm for Allowing Unqualified Persons to Author Muni Research Reports

A firm settled FINRA charges for allowing three unqualified associated persons to author municipal securities research reports.

According to the AWC, the three associated persons co-authored, along with qualified municipal securities representatives, 470 municipal securities research reports without having passed the Series 52 examination or being qualified as a general securities representative. FINRA found that one of the associated persons authored four additional reports without a qualified municipal securities representative as a co-author.

FINRA found that the firm violated MSRB Rule G-2 ("Standards of Professional Qualification") and MSRB Rule G-3 ("Professional Qualification Requirements").

To settle the charges, the firm agreed to (i) a censure and (ii) pay a $100,000 fine. FINRA noted that upon discovering the violations, the firm conducted a review of its municipal research licensing practices and suspended the publication of municipal bond research reports until the entire municipal research team had taken and passed the Series 52 examination.