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August 06, 2024 at 02:37 PM
The Financial Industry Regulatory Authority has censured and fined a broker-dealer $60,000 for failing to establish and maintain written policies and procedures reasonably designed to achieve compliance with Reg BI and the Form CRS requirements.
Since June 30, 2020, JVM Securities has acted as placement agent for private placement offerings that it has recommended to retail customers, according to FINRA’s order.
However, the firm’s written policies and procedures contained no provisions relating to Reg BI until March 1, 2022.
After that date, “the firm’s various updated versions of its policies and procedures have discussed Reg BI only in general terms, have not been tailored to the firm’s business, and have not prescribed procedures for complying with Reg BI,” the order states.
For instance, “one version of the policies and procedures discussed customer account monitoring services, even though the firm did not maintain customer accounts,” the order states. “And the firm’s current policies and procedures do not specify the steps that registered representatives must take to comply with Reg BI.”
The firm’s current policies and procedures are also not reasonably designed to achieve compliance with Reg BI’s conflict of interest obligation, according to FINRA.
“Although the firm has recommended offerings of securities issued by its affiliates, its policies and procedures do not address potential conflicts of interest relating to those recommendations,” the order states.
