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SEC Upholds FINRA Bar for Failing to Timely Respond


The SEC has upheld a FINRA bar of a registered rep for failing to timely respond to FINRA’s requests for information.  Following the filing of a U5 indicating the rep was terminated for failure to comply with firm policies and disclosure obligations, FINRA initiated an investigation.  The respondent repeatedly failed to respond to requests sent to his CRD address.  Eleven months after the initial request and 9 months after the bar became effective, the respondent sought relief from the bar on the grounds that health issues prevented his timely response.  The SEC rejected his argument because he continued to work and remain active and failed to timely respond as reasonably practical.

OUR TAKE: The regulators will proceed with penalties if you ignore their requests for information.  Once penalties, such as an industry bar, are imposed, it becomes very difficult to demonstrate good faith.


Former CCO Fined and Barred for Life for Circumventing SEC Order

 The SEC fined and permanently barred a former broker-dealer chief compliance officer for violating a prior 5-year bar by consulting with the BD on FINOP matters including financial statements and FOCUS filings.  The SEC accuses the respondent from executing a consulting agreement on the day after he resigned to comply with the prior bar.  According to the SEC, the respondent “continued to run the day-to-day operations” for the next 3 years and maintained a BD email account.

OUR TAKE: There is a special place in the basement of the SEC Enforcement Division with wall photos of recidivists.  The SEC staff will show no quarter to those that violate enforcement settlements.