Broker-Dealer Settles FINRA Charges for Disclosure Omissions

A broker-dealer settled FINRA charges for negligent withholding of material information regarding the sale of securities issued by an alternative asset management firm.

In a Letter of Acceptance, Waiver and Consent, FINRA stated that between June 8, 2018 and June 29, 2018, the broker-dealer failed to tell eight investors material information about the issuer, including (i) its failure to timely file audited financial statements with the SEC and (ii) that the firm was being accused of falsifying financial statements. FINRA found that the firm violated FINRA Rule 2010 ("Standards of Commercial Honor and Principles of Trade").

To settle the charges, the broker-dealer agreed to (i) a censure, (ii) a $45,000 fine and (iii) a partial restitution of $32,385 plus interest.