The Financial Industry Regulatory Authority has penalized MML Investors Services for delays in updating the records of its registered representatives, Financial Advisor reports.
In a letter of acceptance, waiver and consent with FINRA, MML did not admit or deny the allegations but consented to the findings, agreed to pay a $250,000 fine and was censured.
The violations cover the period from December 2018 through February 2021. According to FINRA’s settlement letter, MML failed to timely amend its financial advisors’ Forms U4 and Forms U5 to report 39 customer complaints and dispositions, criminal charges, regulatory actions, and other disclosable events. The company also failed to establish and maintain a supervisory system reasonably designed to ensure the timely reporting of disclosable events during that time, the regulator said.
Form U4 is used to establish the registration of broker-dealer representatives, investment advisers or issuers of securities with the appropriate jurisdictions and/or self-regulatory organizations. Form U5 is used to terminate registration and, if relevant, provide details why an individual left the firm. In the AWC letter, FINRA said timely and accurate information on the two forms is critical to screening and monitoring registered representatives, and disclosing information that may appear in their BrokerCheck records.
MML said it cooperated fully with FINRA and was pleased to have resolved the matter.
The case originated when FINRA began investigating whether the firm had provided timely disclosures regarding the conduct of one of its former registered representatives. The disclosure delays ranged from three days to more than 1,100 days after the firm received notice of the reportable events at issue. FINRA member firms are required to file the necessary forms within 30 days of learning a reportable event.
MML was fined $300,000 for similar infractions in 2011, FINRA noted.
The attorneys at Hyman Cotter PC worked at the SEC, as in-house counsel at Morgan Stanley, at UBS, and at some of the largest law firms in the world. They blend industry and regulatory experience when representing financial professionals in Form U5 disputes and other related concerns. If you are concerned that you may be, or if you already have been, terminated from your firm, or if you believe you have inaccurate information on your Form U5, we invite you to contact us at 312-291-4600 or through our online contact form to schedule a free consultation.
