FINRA Sanctions Firm for Form CRS Disclosure Deficiencies

A firm settled FINRA charges for failing to disclose disciplinary history in its customer relationship summary ("Form CRS").

According to the AWC, the firm failed to respond "Yes" on a question on Form CRS concerning legal and disciplinary history, despite the firm and two representatives having such reportable events. FINRA also found that the firm omitted the heading required by CRS Form (Item 4) both before and after amending its answers.

As a result, FINRA said the firm violated Exchange Act Section 17(a)(1) ("Records and Reports") and Rule 17a-14 ("Form CRS, for preparation, filing and delivery of Form CRS"); and FINRA Rule 2010 ("Standards of Commercial Honor and Principles of Trade").

To settle the charges, the firm agreed to (i) a censure; (ii) a $25,000 fine; and (iii) an undertaking to review and remediate its Form CRS deficiencies, and to file, deliver, and publicly post a compliant Form CRS within 60 days.