Last year, Wall Street’s not-so-robust self-policing agency found itself answering some awkward questions about all of its members’ unreported bankruptcies, tax liens, criminal guilty pleas and the like, and why it was deleting them from its database. It didn’t care for the experience. So this year, it’s asking the questions. You know, like a regulatory body probably should.
In individualized notifications sent to a handful of firms through the central registration depository (CRD) system earlier this week, FINRA flagged cases where a firms’ brokers had liens and judgments that were never reported. At one independent broker/dealer, FINRA was seeking information on 3,400 separate instances of unreported Form U4 issues within 30 days. One case was from 1986 for an $80 lien, according to a source familiar with the matter….
“FINRA’s just at a point now where they’re saying ‘we’re going to require firms to report them all,' whether or not they make sense or serve the investing public,” said Don Runkle, a compliance consultant with Edgerton & Weaver.
FINRA Going After Firms For Unreported Judgments, Liens [Wealth Management]