Broker-Dealer Fined for Omitting Information on Form CRS

A broker-dealer settled FINRA charges for failing to disclose its disciplinary history and the disciplinary history of several of its representatives as required by the customer relationship summary ("Form CRS").

In a Letter of Acceptance, Waiver and Consent ("AWC"), FINRA stated that the broker-dealer omitted required information by failing to respond "Yes" on Form CRS to whether or not the broke-dealer and several of its representatives had legal or disciplinary history. FINRA found that the broker-dealer had been subject to disciplinary actions for (i) allowing a representative to conduct securities transactions after their registration had expired, (ii) operating without the minimum required net capital and (iii) engaging in securities business in a state where the representative was not registered. Additionally, the broker-dealer's CEO and five of its registered representative's had U4, U5 or U6 filings with legal or disciplinary actions.

FINRA concluded that the broker-dealer violated Exchange Act Section 17(a)(1) ("Records and Reports"), Exchange Act Rule 17a-14 ("Form CRS, for preparation, filing and delivery of Form CRS") and 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 $35,000 fine and (iii) the undertakings set forth in the AWC.