If you ever wonder whether all the rules and policies really matter, they DO! Let's look at some recent FINRA enforcement cases:
- OBA related: Individual was fined $5,000 and suspended for three months for engaging in an OBA without providing prior written notice to his broker dealer. The rep began consulting on a full-time basis for a financial technology provider without his firm’s approval. In addition, the rep falsely attested on his Annual Business Questionnaire (ABQ) that he was not engaged in any undisclosed OBAs.
- Private Securities Transactions related: Individual was fined $10,000, was suspended for six months, and ordered to pay a deferred disgorgement of financial benefits received in the amount of $4,000, plus interest. The rep had participated in private securities transactions by soliciting investors to invest a total of $120,000 in promissory notes issued by a company claiming to operate crypto asset mining and investment programs without prior approval from his BD. Only one of the investors was a customer of the firm. The rep’s involvement included introducing the investors to the investment opportunity, providing information regarding the funds offered, and facilitating their transactions. In addition, the rep falsely answered an annual compliance questionnaire that he had not engaged in private securities transactions.
- Audit related: Individual was barred from association with any FINRA member for refusing to provide documents and information requested by FINRA during an investigation into the rep’s recent U5. The U5 noted the rep was discharged following provision of falsified documentation, failure to cooperate in an internal audit, and lack of candor.
Please contact the Prosperity Network Compliance Team with any questions: compliance@prosperityadvisors.comor 913-529-5500 Option 2.
Dianne L. Eggert, CFE
Compliance Manager
Internal Use Only
Attachment:Disciplinary Actions April 2025