FINRA accepts AWC from member firm | Orrick, Herrington & Sutcliffe LLP – JDSupra

In some recent news from November 11, FINRA accepted a Letter of Acceptance, Waiver, and Consent (AWC) from a member firm based in New York. The firm, known as the respondent, was called out for allegedly not disclosing its own and its control affiliates’ disciplinary history in its customer relationship summary from June 30, 2020, to May 1, 2023. This omission on Form CRS was a big no-no, as it goes against certain rules like Section 17(a)(1) of the Securities Exchange Act of 1934, Exchange Act Rule 17a-14, and FINRA Rule 2010.

Part of the Form CRS requirements includes being transparent about the services a firm offers, the standards of conduct it follows, and its legal and disciplinary history. Unfortunately, the respondent fell short in this area. On top of that, they also failed to establish and maintain a supervisory system that would help them stay in line with these important rules. This lack of oversight led to a violation of FINRA Rules 3110 and 2010.

As a result of these missteps, the respondent agreed to a censure, a $30,000 fine, and a commitment to putting in place compliant written supervisory procedures within the next 60 days. It’s a reminder that staying on top of these regulations is crucial in the world of finance to protect both firms and investors.