FINRA Censures Firm for Unreported Call-Center Complaints

A broker settled FINRA charges for failing to review and report thousands of customer complaints submitted through call-center surveys.

According to the AWC, the firm received more than 220,000 written survey responses and reported 2,423 complaints to FINRA, but failed to report more than 1,600 others. Most of the unreported complaints concerned service issues, though some involved customers' inability to access funds, trouble obtaining account information, technical problems with the firm's online system, and security incidents.

FINRA found that the firm's supervisory system was not reasonably designed to catch the complaints, because it flagged survey responses for review using a lexicon of search terms originally built for consumer-banking products rather than for review of broker-dealer communications. FINRA found that more than 85 percent of the unreported complaints were never flagged as potential complaints. FINRA acknowledged that the firm self-disclosed the failure in 2024, conducted a one-year lookback, resolved the complaints it found, and suspended the survey comment field.

FINRA said the firm violated Rule 4530(d) ("Reporting Requirements"), which requires quarterly reporting of written customer complaints; Rule 3110(a) and (b) ("Supervision"); and Rule 2010 ("Standards of Commercial Honor and Principles of Trade").

The firm agreed to a censure and a $225,000 fine. FINRA said it credited the firm's self-disclosure and remediation.