A registered representative settled FINRA charges for failing to timely file an amended Form U4 ("Uniform Application For Securities Industry Registration or Transfer").
In a Letter of Acceptance, Waiver and Consent, FINRA found that a registered representative failed to timely disclose a tax lien filed in 2017. The individual disclosed the tax liability on Form U4 in January 2019. FINRA found the representative violated the 30-day requirement under Article V, Section 2(c)("Application for Registration") of FINRA's By-Laws, FINRA Rule 1122 ("Filing of Misleading Information as to Membership or Registration"), and FINRA Rule 2010 ("Standards of Commercial Honor and Principles of Trade").
To settle the charges, the registered representative agreed to (i) a 20 business day suspension from associating with any FINRA member firms, and (ii) a $5,000 fine.
Commentary
This should serve as a warning to associated persons to keep their Forms U4 current, even as to matters that do not relate directly to securities activities. In this case, the information was potentially significant as it indicated that the individual may have been in financial distress, which could be a red flag for the compliance department to monitor the conduct of the individual more closely.
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