On November 11, FINRA accepted a
Letter of Acceptance, Waiver and Consent (AWC) from a member firm (the respondent) based in New York. According to the letter, from June 30, 2020, to May 1, 2023, the respondent allegedly failed to disclose its own and its control affiliates’ disciplinary history in its customer relationship summary, which must be reported on Form CRS. FINRA alleged this violated Section 17(a)(1) of the Securities Exchange Act of 1934, Exchange Act Rule 17a-14, and FINRA Rule 2010. Among other things, Form CRS requires disclosures about the types of services a firm offers, the applicable standards of conduct, and the legal and disciplinary history of the firm and the financial professionals. Additionally, the respondent failed to allegedly establish and maintain a supervisory system reasonably designed to achieve compliance with these requirements, violating FINRA Rules 3110 and 2010. As a result, the respondent consented to a censure, a $30,000 fine, and an undertaking to certify the implementation of compliant written supervisory procedures within 60 days.
