Broker-Dealer Settles FINRA Charges for Unauthorized Equity Research

A broker-dealer settled FINRA charges for publishing roughly 300 equity research reports over more than five years without first obtaining required approvals or proper registrations.

According to the AWC, the firm engaged in the publication of unapproved equity research reports, allowed four individuals to perform functions that require registration as Research Analysts or Research Principals without holding those registrations, and allowed supervisors to review or supervise the reports without being registered as Research Principals. FINRA noted that two of the individuals later obtained the required registrations and the other two were no longer associated with the firm. 

FINRA found that the firm violated NASD Rule 1017 ("Application for Approval of Change in ... Business Operations") for authorization to conduct the research; FINRA Rule 1210 ("Registration Requirements") and FINRA Rule 1220 ("Registration Categories") FINRA Rule 2010 ("Standards of Commercial Honor and Principles of Trade") and FINRA Rule 3110 ("Supervision"). 

To settle the matter, the firm agreed to a censure and an $85,000 fine to settle the charges.