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Regulatory Sanctions

Rent-A-FinOp/COO Slapped for Amending Her Own Form U5

May 23, 2018

by Howard Haykin


In some ways, the circumstances in this case are akin to a broker who tries to personally settle a customer's complaint. You shouldn't do it because you're not permitted to do it. And, in the end, if you're caught the punishment is usually worse than the 'crime' itself. 


An individual who ‘rents out her services’ as FinOp and CCO to numerous broker-dealers agreed to settle FINRA charges that, without authorization from her member firm, she accessed its Central Registration Depository (CRD) account using her own User ID and amended its Form U5 filing regarding her termination from the firm. For her violative conduct, she must pay a $5K fine, serve a one-month suspension and complete 10 hours of continuing education.


FINRA FINDINGS.    The individual, who holds 4 principal licenses - Series 27 and 28 (FinOp), Series 4 (Options) and Series 24 (General Securities) - has 22 years’ experience with 31 firms. (So she knows her way around the system).


From May 23, 2016 through August 23, 2017, while registered with Noble Capital, this individual served as the Firm's Chief Compliance Officer ("CCO"). In that capacity, she was authorized to access the Firm's CRD account to make required disclosures. On August 23, 2017, Noble Capital filed a Form U5 terminating the individual’s registration with the Firm.


After reviewing the U5 filing, the individual asked the firm to amend the language in its filing – a request the firm denied. The following day, the individual (who still had access to the firm’s CRD account), logged onto the Firm's CRD account using her own User ID and amended her Form U5. Among other things, she changed the reason for her termination from "permitted to resign" to "voluntary," and changed the termination explanation.


Although the revised termination explanation was not false, the firm had not approved it or otherwise authorized this individual to access its CRD account. Five months later, however, Noble Capital filed an amended Form U5, which changed the reason for the individual’s termination to "other," and included the following termination explanation: "Firm no longer able to accommodate employee's request to work from remote location."


This case was reported in FINRA Disciplinary Actions for May 2018.

For details on this case, go to ...  FINRA Disciplinary Actions Online, and refer to Case #2017055369201.