FINRA Suspends Broker Over False Statements and Undisclosed Brokerage Account
FINRA suspended a broker for making false statements to her firm and failing to obtain approval before opening an outside brokerage account.
According to the AWC, the broker established a foundation where she served as trustee and received approximately $675,000 that had been designated from a customer’s bequest. FINRA said the broker misrepresented to her firm that she would not have direct or indirect control over the foundation’s investment decisions and that her trustee role was unrelated to any customer relationship. FINRA concluded that she in fact managed the foundation’s brokerage account and used the entity to receive funds connected to a firm client.
FINRA also found that the broker opened a brokerage account for the foundation at another FINRA member firm without obtaining prior written consent from her firm. FINRA said the broker failed to disclose the account for more than five months and falsely represented in firm compliance documents that she had no outside accounts.
FINRA determined that, based on the broker's actions described above, the broker violated FINRA Rules 2010 ("Standards of Commercial Honor and Principles of Trade") and 3210 ("Accounts At Other Broker-Dealers and Financial Institutions").
The broker consented to (i) a six-month suspension from associating with any FINRA member in all capacities and (ii) a $5,000 fine.