FINRA Fines BD For Delays in Delivering Prospectuses

FINRA AWC Letter No. 20100229218

May 5, 2011

FINRA fined a St. Louis-based broker-dealer $1 million for its failure to deliver mutual fund prospectuses in a timely manner to nearly one million customers. The FINRA action alleges that the firm failed to take action to correct the prospectus delivery failures even after the third-party service provider who mailed prospectuses to customers informed the firm that customers were not receiving prospectuses on time. In addition, FINRA alleged that the broker-dealer failed to promptly report information on its representatives through Forms U4 and U5.

Cross References

FINRA News Release

FINRA Rule 2010

NASD Rule 2110