Firm Settles FINRA Charges for Reg BI and Form CRS Deficiencies

A broker-dealer settled FINRA charges for failing to establish a supervisory system designed to achieve compliance with Regulation Best Interest ("Reg BI") and for omitting required information on the firm's Form CRS.

According to the AWC, the firm's written policies and procedures contained no specific provisions relating to Reg BI. FINRA found that the firm failed to address Reg BI's Conflict of Interest Obligation or the Duty of Care Obligation. As a result, FINRA said the firm failed to establish and maintain supervisory systems reasonably designed to achieve compliance with Reg BI. FINRA also found that the firm omitted required information from its Form CRS. FINRA said that the firm's policies contained no reference to Form CRS and did not prescribe procedures for supervising review of its Form CRS.

FINRA found that the firm violated SEA Section 17(a)(1) of the Exchange Act ("Records and Reports") and Rule 17a-14 ("Form CRS, for preparation, filing and delivery of Form CRS") and FINRA Rules 3110 ("Supervision") and 2010 ("Standards of Commercial Honor and Principles of Trade").

To settle the charges, the firm agreed to (i) a censure, (ii) a $35,000 fine and (iii) an undertaking to remediate the deficiencies and implement WSPs.