FINRA Fines Massachusetts BD $300,000 for Failing to Disclose Customer Complaints
The Financial Industry Regulatory Authority fined Massachusetts broker-dealer, Citizens Securities, $300,000 for allegedly failing to report certain disclosable events, according to a letter of acceptance, waiver and consent issued by the regulators.
Citizens Securities is a retail brokerage firm headquartered in Dedham, Massachusetts and employs approximately 1250 registered representatives.
FINRA requires firms must keep their representatives’ registrations current on form U4 by filing certain amendments no later than 30 days after learning of the facts or circumstances giving rise to the need for the amendment. When a registered representative leaves a firm for any reason, the firm must file a form U5 within 30 days of the rep leaving the firm.
According to FINRA, from January 2010 through June 2016, Citizens Securities failed to timely disclose 45 customer complaints and settlements on its associated persons’ forms U4 and U5.
In addition, 22 individuals associated with the firm reported disclosable events such as outside business activities or bankruptcies on their annual compliance questionnaires, yet Citizens Securities did not timely amend the individuals’ forms U4, according to FINRA.
The firm also allegedly failed to establish and maintain a supervisory system designed to ensure the timely reporting of disclosable events.
Specifically, FINRA said that individuals at firm responsible for reviewing customer complaints lacked sufficient training about the criteria that required the Firm to report customer complaints and the deadlines for doing so.
Citizens Securities signed the letter and agreed to pay the fine without admitting or denying the findings. The company does not have any relevant disciplinary history with the Securities and Exchange Commission, any self-regulatory organization or any state securities regulator.
