FINRA's quarterly list of recent disciplinary actions higlighted 7 particular actions taken by registered reps that, so to speak, "ruffled the regulator's feathers." 

1. Willful Failure to Disclose Material Information on the Form U4
2. Misuse of Confidential Customer Information
3. Receiving and Distributing a Continuing Education Answer Key
4. Changing Customer Records, Causing Firm Records to be Inaccurate
5. Falsifying Firm Documents
6. Borrowing Funds From an Elderly Firm Customer Against Firm Policies
7. Trading on Material Non-Public Information

Here's a sampling stories of what RR's did wrong.  For further details, go to:  [FINRA Quarterly Disciplinary Review, March 2011]

        #1. Willful Failure by RR's to Disclose Material Information on Form U4.    FINRA's NAC (Nat'l Adjudicatory Council) barred this registered individual and charged him for costs of the proceedings.  In the case, the registered individual was also an attorney licensed to practice law.  However, his law license was suspended by the state for 3 years for various misdeeds - e.g., false representations to clients, affixing a client’s signature to a document, commingling client funds with his own. 

Some 4 months later, the individual filed a Form U4, registering as an investment company products/variable contracts limited rep without disclosing his problems with the state regulatory agency -  e.g., he answered "no" to a question on Form U4 asking whether any state regulatory agency has ever found him to have made a false statement or omission, or been dishonest, unfair or unethical;  he inaccurately answered “no” to a question of whether any state regulatory agency has ever revoked or suspended his license to practice law. 

A year later, he submitted another Form U4 when he changed firms, and again failed to disclose the suspensions and revocation of his law license.  An investigation ensued and the registered individual amended his Form U4.  But that was too little, too late - he had violated NASD Rule 2110, Ethical Standards, and IM-1000-1, filing misleading information as to registration.

        #2.  Misuse of Confidential Customer Information.   FINRA's NAC fined an RR $10K and suspended him for 10 days for having misused confidential customer information, including information that constituted nonpublic personal information under Regulation S-P.   Upon leaving his firm to join a new one, the RR downloaded customer information onto a flash drive, which he took with him.  He later learned that he had downloaded not only information pertaining to his 200 customers, but also confidential customer information belonging to 36,000 others.  All information was provided to his new firm so that the firm could mail a “welcome package” to the customers and transfer their accounts to the new firm. The RR never told the new firm that the customer  information he provided was his former firm’s proprietary information. 

The RR violated Ethical standards, because he had signed several agreements with his firm agreeing that confidential customer account information was proprietary to the firm, that such information could not be reproduced or appropriated for the use of others, and that it could not be disclosed to third parties without the firm’s prior written permission.  He also agreed to abide by codes of conduct and ethics that indicated that associated persons were authorized access to customer information only for legitimate firm business purposes and not for any other use. 

        #5.  Falsifying Firm Documents.   An RR agreed to a $5K fine and one month suspension to settle FINRA charges he falsified 2 documents - an investor application and agreement, and an investor profile questionnaire - by signing another RR's name.   This came about because a  customer visited a firm office to open an account, and completed an application and questionnaire to do so.  The broker who had been working with this particular customer was not in the office that day.  In his absence, this RR met with the customer, signed the other broker’s name to the application and questionnaire, and submitted the documents to the firm without the other broker’s consent. 

        #7.  Trading on Material Non-Public Information.   An unregistered associated person was barred from the industry and disgorged of $24K in illcit gains.  FINRA charged the individual with buying and selling securities while in possession of material non-public information about the issuer. At the time, the associated person worked in the investment banking department of a member firm. The firm’s investment banking department was advising a Nasdaq-listed issuer on general merger discussions and a specific offer from another issuer to acquire all of the first issuer’s outstanding shares. 

The associated person held two securities accounts at another firm, which he had never disclosed to his employer.  He also failed to advise the firm that held his 2 accounts that he had become associated with a member firm.  This enabled the associated person to pick up and trade on material, non-public information without his firm knowing.  All told, the individual realized nearly $25K in illicit profits. 

The associated person later failed to respond to FINRA requests for information regarding his trading in the issuer’s stock.