If you ever wonder whether all the rules and policies really matter, they DO! Let's look at some recent FINRA enforcement cases.
Listed below are some real-world examples of FINRA discipline from FINRA’s March 2025 disciplinary actions report:
- OBA related: Individual barred from association with any FINRA member for terminating his association with the member firm while under internal review for non-firm approved activities involving the representative’s family member, including serving as an executor of the family member’s estate and activities with respect to outside checking accounts held with the family member.
- Off-channel communication related: Individual was fined $5,000 and suspended for one month for using an unauthorized personal email account to send and receive securities-related business communications to firm customers. The rep had previously attested he only used his assigned firm email address for business communications with firm customers.
- Individual barred from association with any FINRA member for refusing to produce information requested by FINRA in connection with changing customer’s investment objectives without their consent, mismarking transactions as "unsolicited," and accepting trading instructions from unauthorized individuals.
- OBA related: Individual fined $7,500 and suspended for four months for participating in an OBA without prior written notice to his member firm.
- Complaint related: Individual fined $10,000 and suspended for six months for failing to forward a complaint to his firm, as required by its policies. The rep also settled the complaint independently, which was not permitted by the firm.
- Reg BI related: Individual fined $10,000 and suspended for three months for willfully violating Reg BI by recommending two retail customers invest in speculative, unrated corporate bonds that were not in their best interests based on their investment profiles.
- Discretion related: Individual fined $5,000 and suspended for twenty business days for exercising discretion in customer accounts without their written authorization and without the member firm having accepted the accounts as discretionary. The findings stated the customers knowingly permitted the rep to exercise discretion.
Please contact the Prosperity Network Compliance Team with any questions at:
compliance@prosperityadvisors.com or 913-529-5500 Option 2
For Internal Use Only
Dianne Eggert, CFE
Compliance Manager