I had some financial difficulties due to the financial crisis back in 2008. I'd been trying to work things out with the IRS but a couple of months ago they put a lien on my house. I just realized I need to disclose it on my U4 but I think I'm late in doing so. I'm worried now that if I disclose it I'll also get in trouble for not doing so sooner. What are your thoughts?
You need to disclose the lien and do it as soon as possible. Will you have an additional sanction imposed for not disclosing it sooner? Quite possibly. However, much like a bad tooth, these things don't get better with time. The longer you wait, the worse it will be. Particularly because you're now aware of the need to file an Amended U4 and every day you delay is a day you are intentionally failing to comply with the rules. Article V, Section 2[c] of FINRA's by-laws requires an associated person to keep the Form U4 "current at all times," and file any amendments to the Form U4 "not later than 30 days after learning of the facts or circumstances giving rise to the amendment." Additionally, FINRA Rule 1122 provides that "no member or person associated with a member shall file with FINRA information with respect to membership or registration which is incomplete or inaccurate so as to be misleading, or which could in any way tend to mislead, or fail to correct such filing after notice thereof." In a recent disciplinary ruling, FINRA fined a representative $10,000 and suspended him for four months for "willfully" failing to timely amend his Form U4 to disclose a federal tax lien. The findings stated that the representative also failed to report to the firm written complaints he received from his customers which, no doubt added both to the amount of the fine and the length of the suspension, but, nevertheless, heed the example and bite the bullet.
Register or login for access to this item and much more
All Financial Planning content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access