A broker-dealer settled FINRA charges for delaying the disclosure of alleged employee misconduct.
As summarized in the Letter of Acceptance, Waiver and Consent ("AWC"), the broker-dealer was more than 60 days late in disclosing 89 fraud-related internal reviews or allegations over a six-year period. According to FINRA, the delayed disclosures were primarily the result of the firm not having an established supervisory system or written supervisory procedures for disclosing negative information on employees' Form U-5.
To settle the charges, the firm agreed to (i) a censure, (ii) a fine of $1.1 million and (iii) the implementation of supervisory systems outlined in the AWC.
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