Broker-Dealer Fined for Omissions on Form CRS

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

According to the AWC, the firm omitted essential information by responding "No" on Form CRS to the question of whether the firm or its affiliates had legal or disciplinary history. FINRA found that the firm and four of its control affiliates had reportable disciplinary actions, but did not disclose them as required during the relevant period. FINRA also found that the firm failed to establish and maintain a supervisory system to ensure compliance with its Form CRS obligations.

FINRA concluded that the firm 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 Rules 2010 ("Standards of Commercial Honor and Principles of Trade") and 3110 ("Supervision").

To settle the charges, the firm agreed to (i) a censure, (ii) pay a $30,000 fine and (iii) implement revised WSPs.