A broker-dealer agreed to settle FINRA charges for including prohibited conditions in customer settlement agreements.
According to the Letter of Acceptance, Waiver and Consent, the respondent entered into settlement agreements where customers were required to agree not to oppose the firm's attempts to have broker misconduct expunged from the Central Registration Depository. Under FINRA Rule 2081, broker-dealers are prohibited from bargaining for expungement relief as part of customer settlements. The charges relate to two agreements that were prepared in 2015. The agreements were prepared by respondent's outside counsel, reviewed by in-house counsel and the compliance department and, ultimately, signed by representatives of the firm.
FINRA determined that the violations were inadvertent, and imposed a censure and a $20,000 fine.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.