FINRA Settles with the SEC: Accused of Doctoring Documents
Today, FINRA settled civil charges by the SEC which stemmed from accusations that FINRA had doctored certain documents requested by the SEC. The Wall Street Journal reported:
According to the SEC, the director of Finra’s regional office in Kansas City altered in August 2008 the minutes of three internal staff meetings, editing or deleting certain information hours before providing the “inaccurate and incomplete” documents to the SEC’s inspection team.
The Finra director wasn’t identified in documents released by the SEC on Thursday. The SEC said the person resigned in 2010 after the alleged offenses were exposed.
The 2008 incident was the third time in eight years that an employee of Finra or predecessor the National Association of Securities Dealers provided altered or misleading documents to the SEC, it said. See article here.
The settlement provides, in part, for remedial measures, such as educating its staff members on “document integrity.”
Interestingly, in August of this year, an SEC employee accused the SEC of destroying thousands of documents concerning investigations into Wall Street banks and hedge funds. The SEC countered that it follows a system of periodically destroying documents, which does not violate any securities laws or policies. See the Wall Street Journal article from August here.
Regardless of the merit of the accusations against these agencies, individuals subject to SEC or FINRA inquiries can take a lesson from these headlines. Individuals who are the subject of an inquiry by the SEC or FINRA should ensure that they maintain copies of any information provided to the agencies and never alter any documents in an investigation. Providing complete and accurate information to a watchdog can be a difficult task, but an experienced attorney can guide you through the process and help you ensure that you are in compliance with securities laws.