If you ever wonder whether all the rules and policies really matter, they DO! Let's look at some recent FINRA enforcement cases:
- Reporting Cash Transactions: An individual was fined $5,000 and suspended for 12 months for failing to report cash transactions over $10,000. The rep made cash deposits in a firm account totaling $58,970. Each individual deposit was in an amount below $10,000, which evaded federal reporting requirements that would have caused the firm to file Currency Transaction Reports (CTRs). Note: Cetera has specific rules regarding depositing Bank drafts, cashier’s checks, bank checks and treasurer’s checks. Cetera does not permit cash, checks made payable to cash, money orders, or traveler’s checks to be deposited into client accounts.
- Reg BI Care Obligation violations: An individual was suspended for seven months for willfully violating the Care obligation of Reg BI by making recommendations to 19 retail customers, at least 13 of whom were seniors, which were not in their best interests. The findings stated that he recommended that customers implement a short-term strategy that involved buying stocks in commission-based brokerage accounts rather than in the customers’ existing fee-b ased advisory accounts at a lower comparative cost.
- Borrowing from a friend which was also a customer: An individual was fined $5,000 and fined for two months for borrowing $750,000 from one of his securities customers without obtaining approval from his Firm. The customer was wealthy and had been his personal friend for 25 years.
Please contact the Prosperity Network Compliance Team with any questions: compliance@prosperityadvisors.com or 913-529-5500 Option 2.
Internal Use Only
Attachment: Disciplinary Actions March 2026