BD Pays $3.4 Million to Settle Charges Including Failing to File Regulatory Info

A large broker-dealer agreed to pay $3.4 Million to settle charges that included failure to report over 350 significant regulatory events to FINRA in a timely manner.  FINRA alleges that over an 8-year period, the respondent failed to timely report securities law violations, employee disciplinary actions, and securities litigation settlements.  FINRA also faults the firm for failing to file copies of civil complaints and arbitration claims.   The firm also failed to notify FINRA that its AML compliance officer and another employee received Wells notices.  FINRA rules require the filing of such information within 30 days.  FINRA’s Enforcement Chief explained, “FINRA uses this information to identify and initiate investigations of firms and associated persons that pose a risk to investors.”

OUR TAKE: Back in the bad old days, failing to file information may have prompted an unpleasant phone call or, perhaps, a nasty letter.  Now, such failings can result in multi-million dollar fines.