What You Need to Know
- The former broker at Union Square Advisors was charged with three felonies.
- The ex-broker had 10 days to disclose his nolo contendere plea to one of the charges and did not do so.
- Union Square terminated the ex-broker last year.
The Financial Industry Regulatory Authority fined a former broker at Union Square Advisors $5,000 and suspended him for six months for not disclosing to the firm in a timely manner that he was charged with multiple felonies, according to the self-regulatory organization.
On July 24, 2019, the former broker, Paul Tadashi Inouye, was charged with felony “rape of spouse unconscious by intoxication & anesthetic substance” and, on Oct. 8, 2019, he was charged with felony false imprisonment by violence, according to FINRA.
On Oct. 8, 2019, he entered a nolo contendere plea to the second felony charge, FINRA said. The rape charge was dismissed.
Failure to Disclose
“Inouye failed to timely amend his Form U4 to disclose that he had been charged with the two felonies and failed to amend his Form U4 to disclose his nolo contendere plea to a felony,” according to FINRA.
“By willfully failing to timely amend his Form U4 to disclose his felony charges and willfully failing to amend his Form U4 to disclose his nolo contendere plea, Inouye violated” Article V, Section 2(c) of FINRA’s By-Laws and FINRA Rules 1122 (regarding the filing of misleading information about membership or registration) and 2010 (governing standards of commercial honor and principles of trade), FINRA said.
Without admitting or denying the findings of FINRA’s investigation, Inouye signed a FINRA letter of acceptance, waiver and consent March 25 in which he consented to the imposition of FINRA’s sanctions. FINRA signed the letter Tuesday.
Inouye is no longer registered as a broker, according to his report at FINRA’s BrokerCheck website. This means the suspension can only be enforced if he becomes registered once again; also, FINRA can’t force him to pay any fine or restitution unless he decides to become a registered rep again. He faces a 10-year statutory disqualification due to the nolo contendere plea.
In July 2015, Inouye became registered with FINRA as a general securities representative through his association with Union Square Advisors, according to FINRA. On Feb. 3, 2020, Union Square filed a Form 5 Uniform Termination Notice, terminating his registration with FINRA. The regulator didn’t specify why he was terminated.