Broker-Dealer Settles FINRA Charges for Failing to Obtain Approvals on Ownership Structure Changes

A broker-dealer settled FINRA charges for making material changes to its ownership structure without obtaining the regulator's approval.

According to the Order, the broker-dealer twice made material changes to its ownership structure that resulted in one entity owning more than a 25 percent interest in the broker-dealer without obtaining FINRA's approval. FINRA found that the broker-dealer did not file a continuing membership application seeking approval of the changes until five years after the first change and over one year after the second.

FINRA determined that the delay in filing the application violated FINRA Rule 1017 ("Application for Approval of Change in Ownership, Control, or Business Operations") and Rule 2010 ("Standards of Commercial Honor and Principles of Trade"). To settle the charges, the broker-dealer agreed to (i) a censure and (ii) a civil monetary penalty of $15,000.