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.
I received an e-mail from a client that said that, going forward, all decisions regarding her and her husband's accounts required approval from both of them. Apparently, the couple is separating and the wife learned that her husband had changed the account notification settings so they would only go to his e-mail. The wife is asking me to make sure that she receives notifications as well. Our agreement states that instructions from one spouse are all that is required. How should I handle this?
Despite what the agreement says, I can almost guarantee you that, at this point, if you were to take trading instructions from one spouse without getting the approval of the other, you and your firm will be defending an arbitration claim. What I suggest is you get both parties on the phone, or have them come in, and explain to them you will not be put in the middle of their marital problems. Explain that you will add both parties' e-mail addresses on the accounts as they had been and that, moving forward, you will only accept joint instructions from both of them. Furthermore, you should tell them if they object to this, they should seek an Order from the court or they can take their business elsewhere. You need to be firm with them and do this for your own protection.
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