January 23, 2022

Volume XII, Number 23

Advertisement
Advertisement

January 21, 2022

Subscribe to Latest Legal News and Analysis

January 20, 2022

Subscribe to Latest Legal News and Analysis
Advertisement

Broker-Dealer Settles FINRA Charges for Form U4 Disclosure Failures

A broker-dealer settled FINRA charges for failing to disclose unsatisfied tax liens and judgments on a number of its registered representatives.

In a Letter of Acceptance, Waiver, and Consent, FINRA found that after receiving wage garnishment orders from courts and tax authorities for certain of its registered representatives, the broker-dealer did not sufficiently investigate the events underlying each order to determine if they needed to be disclosed on the representatives' Form U4s. This resulted in the broker-dealer's failure to, or failure to timely, amend the representatives' Form U4s to disclose the unsatisfied liens or judgments. FINRA also found that this failure was caused by deficiencies in the broker-dealer's supervisory system, which led the broker-dealer to rely on its representatives' assessments of the events rather than to conduct an independent review.

As a result of its findings, FINRA determined that the broker-dealer violated Article V, Section 2(c) ("Application for Registration") of FINRA's By-Laws and FINRA Rules 2010 ("Standards of Commercial Honor and Principles of Trade") and 3110 ("Supervision").

To settle the charges, the broker-dealer agreed to (i) a censure and (ii) a $375,000 fine.

Primary Sources

  1. FINRA AWC: Citigroup Global Markets Inc.

© Copyright 2022 Cadwalader, Wickersham & Taft LLPNational Law Review, Volume XI, Number 340
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

At Cadwalader, Wickersham & Taft LLP, we put over 225 years of legal experience and innovation to work for you today. As one of the world's most prominent financial services law firms, we have long-standing client relationships with premier financial institutions, funds, Fortune 500 companies and other leading corporations, and individual private clients. We have earned a reputation for crafting innovative business and financial solutions and developing precedent-setting legal strategies to achieve our clients' goals. The result is simple: We stand out from...

212-504-6000
Advertisement
Advertisement
Advertisement