FINRA Suspends, Fines Representative for Engaging in a Securities Business w/o Proper Licensing & Registration

This is an excerpt from FINRA’s Quarterly Disciplinary Review, January 2017

FINRA settled a matter involving a registered representative who engaged in securities activity prior to being properly licensed and registered. The representative became associated with a firm in September 2014. In order for the representative to interact with customers, he was required to take—and pass—the Series 7 (General Securities Representative Examination) and Series 66 (North American Securities Administrators Association (NASAA) Uniform Combined State Law Examination).

The representative had previously obtained Series 7 and 66 licenses, but his Series 7 license had expired in July 2014 due to his failure to complete continuing education requirements, and his Series 66 license was due to expire in October 2014. The representative began the application filing process to transfer his licenses from his previous firm in September 2014, but he did not complete the application process until December 2014.

Between September 2014 and November 2014, the representative entered 87 customer orders without being properly registered. At all times during the execution of these orders, the representative knew that he was not properly registered.

By executing orders without being registered, the representative violated NASD Rule 1031 (registration requirements) and FINRA Rule 2010 (ethical standards). For this misconduct, FINRA suspended the representative from associating with any FINRA member in any capacity for 30 business days and fined him $5,000.