Among recent enforcement actions by the Financial Industry Regulatory Authority were the censure and fine of a firm for failures relating to private placements; of another for failures relating to monitoring execution times related to TRACE; and of another for failure to disclose reportable unsatisfied liens and judgments of registered representatives.
FINRA Fines, Censures Firm on Lien, Judgment Reporting Failures
RBC Capital Markets LLC was censured by FINRA and fined $300,000 on findings that it failed to amend, or to amend in a timely manner, Forms U4 for registered representatives to report unsatisfied tax liens and civil judgments.
According to the agency, the firm received wage garnishment orders from courts and tax authorities, including the Internal Revenue Service, resulting from tax levies, civil judgments and similar actions, for registered representatives. However, it failed to consistently conduct a sufficient inquiry to determine if the underlying event triggering each garnishment order involved an event that should have been reported on the affected individual’s Form U4.
Its supervisory system also failed, according to FINRA, to ensure that it disclosed reportable unsatisfied liens and judgments of registered representatives on Forms U4, when a garnishment notice was sent to the firm, or to make sure its payroll department notified compliance or supervisory personnel to determine if the garnishment involved a reportable event, or that compliance or supervisory personnel acted appropriately to consider garnishments and disclose reportable events as necessary.
The firm neither admitted nor denied the findings but consented to the sanctions.
FINRA Censures, Fines Florida Firm $100,000 on Private Placements
Clearwater, Florida-based Halen Capital Management Inc. was censured by FINRA and fined $100,000 on findings that the firm distributed a private placement memorandum (PPM) for the company that did not comply with FINRA rules governing member firm communications with the public.
According to the agency, the firm distributed confusing and misleading offering documents for unregistered common stock offered by a company.