Broker-Dealer Settles FINRA Charges for Misleading Filings
Commentary by Steven Lofchie
A retail broker-dealer agreed to settle FINRA charges for filing misleading information about the amounts of alleged damages in customers' complaints.
Specifically, FINRA alleged that the broker-dealer, Edward D. Jones., L.P. ("Edward Jones"), misstated alleged compensatory damage amounts, which were from customer complaints, in the firm's Form U-4 filings. This misstatement allegedly was the result of employees misunderstanding how damage claims in customer complaints needed to be described and detailed.
Edward Jones agreed to a written certification that it has (i) reviewed its systems, policies and procedures governing the disclosure of alleged damages in customer complaints, and (ii) established and implemented systems, policies and procedures that are reasonably designed to achieve compliance.
Edward Jones also agreed to a censure, and to pay a $40,000 fine.
Commentary
This is one of those cases where it is just not clear why a fine was necessary. (Acknowledging that, by today's standards, the fine was not significant.) According to the regulators, the problem resulted from a misunderstanding of the rules, rather than from deliberate misconduct. Further, once the problem was pointed out to the firm, the firm fixed the problem.