The Financial Industry Regulatory Authority has fined a broker-dealer $20,000 for failing to disclose its disciplinary history in the firm’s customer relationship summary, or Form CRS.
According to FINRA's order, VSI Securities Inc., formerly known as Venecredit Securities Inc., had a series of Form CRS failures from June 30, 2020, to Aug. 21, 2025.
When VSI filed its initial Form CRS on April 24, 2020, "it failed to respond 'Yes' to the question concerning legal and disciplinary history, even though the firm in fact had prior reportable legal or disciplinary history," FINRA's order states.
"The Form CRS also omitted the required heading and conversation starters for Item 4," FINRA said, "which states that a firm must respond 'Yes' if it or any of its financial professionals disclose, or is required to disclose, legal or disciplinary history on specified regulatory disclosure forms."
On May 11, 2023, VSI amended its Form CRS on its website but did not file the amended version with the Central Registration Depository.
"This amended Form CRS included the required heading regarding legal or disciplinary history but did not respond 'Yes' to that question." the order states.
"Instead, the firm stated that: 'The individuals responsible for making investment decisions for your account and all other persons at VSI do not have any legal or disciplinary disclosures,'" according to the order.
On May 1, 2025, the firm filed an amended Form CRS with the depository "and again did not respond 'Yes' to the question concerning legal or disciplinary history," the order continues.
"Instead, the firm stated: 'No. Neither the individuals responsible for making investment decisions for your account nor any other persons associated with VSI have any legal or disciplinary disclosures.'”
Subsequently, on Aug. 21, 2025, "the firm filed an amended Form CRS that responded 'Yes' to the question concerning legal or disciplinary history and the firm delivered the corrected Form CRS to all customers."
By filing and delivering to customers a Form CRS that omitted required information, VSI willfully violated Exchange Act § 17(a)(1) and Exchange Act Rule 17a-14 and violated FINRA Rule 2010, FINRA states.
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