- within Intellectual Property, International Law, Litigation and Mediation & Arbitration topic(s)
A broker-dealer settled FINRA charges for inaccurate classification of expenses that resulted in books and records violations.
As described in the Letter of Acceptance, Waiver and Consent, the owner of the firm inaccurately labeled a portion of his personal expenses as business expenses on the firm's general ledger, which was then used to prepare the firm's quarterly Financial and Operational Combined Uniform Single reports. The inaccurate classification of expenses understated the owner's compensation and overstated the broker-dealer's expenses. As a result, FINRA said the firm violated Section 17(a) of the Exchange Act, SEA Rules 17a-3 ("Records to be made by certain exchange members, brokers and dealers") and 17a-5 ("Reports to be made by certain brokers and dealers"), and FINRA Rules 4511 ("General Requirements") and 2010 ("Standards of Commercial Honor and Principles of Trade").
To settle the charges, the broker-dealer agreed to a (i) censure and (ii) $15,000 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.
