Broker-Dealer Settles FINRA Charges for Disclosure Failures of Reportable Events

A broker-dealer settled FINRA charges for failing to timely disclose reportable events of its associated persons.

In a Letter of Acceptance, Waiver and Consent, FINRA stated that the broker-dealer failed to (i) timely amend Forms U-4 and U-5 of its associated persons and (ii) disclose reportable events regarding "customer complaints and arbitrations, the disposition of complaints, criminal charges, bankruptcies, internal reviews and investigations, and regulatory actions." FINRA found that the broker-dealer was late in the reporting of the events by up to 1,100 days.

In addition, FINRA said that the broker-dealer failed to implement a supervisory system sufficient to ensure timely reporting. As a result, the broker-dealer violated FINRA By-Laws Article V Section 2 ("Number of Members and Qualifications") and Section 3 ("Appointments") and FINRA Rules 1122 ("Filing of Misleading Information as to Membership or Registration"), 3110 ("Supervision") and 2010 ("Standards of Commercial Honor and Principles of Trade").

To settle the charges, the broker-dealer agreed to a (i) censure and (ii) $250,000 fine.