Home » Compliance Blog » FINRA » “Wrong Address” Not a Defense for Broker’s Failure to Respond to FINRA Requests

“Wrong Address” Not a Defense for Broker’s Failure to Respond to FINRA Requests

The SEC dismissed the appeal of a terminated broker that FINRA barred for failing to deliver requested information.  FINRA delivered several notices and warnings by mail to the broker’s address of record in the CRD, but the broker claimed not to have received the notices in a timely fashion because he had a new address.  The SEC cited precedent whereby FINRA may rely on the CRD address unless it has actual knowledge of a different address.  Also, FINRA has no obligation to send notices by email or other means.  The SEC also opined that the broker failed to exhaust his FINRA administrative remedies, which included the opportunity for a hearing on the substantive issues.

OUR TAKE: “I didn’t get the memo” is not a valid defense to a regulator seeking information.  The registrant has an obligation to ensure the validity of contact information filed in regulatory databases such as CRD and IARD.

https://www.sec.gov/litigation/opinions/2017/34-80312.pdf

Leave a Reply

Your email address will not be published. Required fields are marked *