Rep Fined/Suspended for Firm Element Malpractice

According to FINRA’s November Disciplinary Actions Notice, an AWC was issued in which a registered representative was fined $3,000, suspended from association with any FINRA member in all capacities for three months and ordered to attend and satisfactorily complete 10 hours of continuing education (CE) for failing to complete his Firm Element continuing education. 

To meet its obligations to provide Firm Element CE under FINRA Rule 1250(b), the Firm used an online eLearning system that delivered various training modules to its registered representatives. Registered representatives were required under the firm’s written policies and procedures to personally complete their assigned training modules by certain deadlines throughout the year.

For over four years, as a registered representative at the firm, the representative was required to personally complete his assigned Firm Element CE modules and other assigned training throughout the year by certain deadlines set by the firm. For four CE modules assigned to him, the representative requested that his client service associate complete the CE modules on his behalf. For example, he requested that his associate complete a Firm Element CE module regarding compliance requirements for municipal securities dealers, and a module required by the Firm regarding Section 5 of the Securities Act of 1933.

At his request, his client service associate completed the above-referenced training on his behalf, and therefore did not complete this training himself. In 2019, the firm conducted an internal investigation into whether the representative’s client service associate completed CE modules on his behalf. During this investigation, he admitted his misconduct to the firm.

As a result, the representative violated FINRA Rule 2010 and consented to the following sanctions:

– a suspension from association with any FINRA member firm in any capacity for 3 months;
– a $3,000 fine, and
– a requirement that within 60 days of the date the AWC is accepted, he will undertake to attend and satisfactorily complete 10 hours of CE through a provider not unacceptable to FINRA. At least 10 days prior to commencing such CE, the representative will notify FINRA’s Department of Enforcement regarding the CE provider(s). Within 30 days of completing the CE, he will also submit written proof that the CE was completed.

For more information on FINRA’s Firm Element requirements, click here.