FINRA has fined and censured a company owned by Cetera Financial Group, one of the countrys largest networks of independent broker-dealers, $40,000 for late and improper filings in more than half of its sales branch offices, among other filing problems.
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Over a two-and-a-half year period ending last year, Cetera Advisor Networks failed to properly file a form known as a Uniform Branch Office Registration Form, according to the
FINE AND CENSURE
Without admitting or denying the findings, Cetera has consented to a number of sanctions, including the fine and the imposition of a censure, according to the FINRA document, which is also signed by Cetera Financial Group general counsel Nina Schloesser McKenna. Cetera also has committed to prompt review of its written supervisory procedures and systems regarding its handling of the branch office form, to make any changes necessary and to report to FINRA on this reviews process and any changes made.
Within 12 months of the date of the report, Cetera has also agreed to review at least 25% randomly selected branch office forms on file with FINRA.
Cetera did not respond to a Financial Planning request for comment by time of publication.
COMPLIANCE 'DEFICIENCIES'
The FINRA letter faults the firm for falling short on its compliance efforts.
During the relevant time period, according to the letter, the Firm's written supervisory procedures required its registered representatives to maintain a current and accurate [branch office form] for each [sales branch] office where a securities business was conducted and to make any changes to such information within the required time period. However, the procedures did not include provisions for monitoring or verifying representatives' compliance ...
Other improprieties in filings at some of the companys 719 sales branch offices included failures to promptly disclose outside business activities and additional websites, FINRA says in the letter; in 389 offices, cited "deficiencies" included belated disclosures pertaining to other investment activities, primarily fixed insurance sales.
The FINRA review also found similar problems at a number of the firms 168 offices of supervisory jurisdiction. Among other improprieties, it noted that outside business activities were not disclosed on time at 32 of these offices and additional websites were not disclosed for 38 offices.
Cetera Advisor Networks is a Cetera firm with a regional management structure. The three other Cetera companies are: Cetera Advisors, whose planners work directly with the home office and not through regional hubs; PrimeVest, whose advisors work in banks, credit unions and other financial institutions; and Cetera Financial Specialists, whose advisors also provide tax and accounting expertise.
The four companies went through a rebranding process last year, with new names that included the name of the parent company.
