FINRA accepts AWC from member firm | Orrick, Herrington & Sutcliffe LLP – JDSupra
On November 11, FINRA accepted a Letter of Acceptance, Waiver and Consent (AWC) from a New York-based member firm. The firm, referred to as the respondent in the letter, was under scrutiny for not disclosing its own and its control affiliates’ disciplinary history in its customer relationship summary from June 30, 2020, to May 1, 2023. This failure to report on Form CRS was a violation of various regulations, including Section 17(a)(1) of the Securities Exchange Act of 1934, Exchange Act Rule 17a-14, and FINRA Rule 2010.
Form CRS is a document that requires firms to disclose information about the services they offer, their standards of conduct, and any legal or disciplinary history that may impact their clients. In this case, the respondent did not meet these transparency requirements. Additionally, the firm was accused of not having a supervisory system in place to ensure compliance with these rules, which led to violations of FINRA Rules 3110 and 2010.
As a result of these findings, the respondent agreed to a censure, a $30,000 fine, and a commitment to establish and certify the implementation of compliant written supervisory procedures within 60 days. This serves as a reminder of the importance of full and accurate disclosures in the financial industry to protect both firms and investors.