1. September 19, 2007: Chase Bank $5,627;2. September 15, 2009: Chase Bank $2,345.25;3. July 13, 2009: RAB Performance Recoveries LLC $7,215.61;4. January 21, 2010, Cach LLC $8,282.55; and5. May 6, 2011, Midland Funding $4,990.95.
[I]n January 2011, a member of MetLife Securities Corporate Licensing and Registration department emailed Nagi informing him that her department had been notified that his wages were being garnished by Chase Bank and that it appeared to be an event that should have been disclosed on his Form U4. The email also noted that such disclosures were required to be made within 30 days of the event and that Nagi should make that disclosure immediately. . .
REGISTERED REPRESENTATIVE DID NOT FOLLOW COMPANY POLICIES WITH RESPECT TO OUTSIDE BUSINESS ACTIVITIES AND DID NOT DISCLOSE REQUIRED INFORMATION ON FORM U-4
In addition to the above By-Law provision, FINRA also requires the observance of this rule:Application for RegistrationSec. 2. (a) Application by any person for registration with the Corporation, properly signed by the applicant, shall be made to the Corporation via electronic process or such other process as the Corporation may prescribe, on the form to be prescribed by the Corporation and shall contain:(1) an agreement to comply with the federal securities laws, the rules and regulations thereunder, the rules of the Municipal Securities Rulemaking Board and the Treasury Department, the By-Laws of the Corporation, NASD Regulation, and NASD Dispute Resolution, the Rules of the Corporation, and all rulings, orders, directions, and decisions issued and sanctions imposed under the Rules of the Corporation; and(2) such other reasonable information with respect to the applicant as the Corporation may require.(b) The Corporation shall not approve an application for registration of any person who is not eligible to be an associated person of a member under the provisions of Article III, Section 3.(c) Every application for registration filed with the Corporation shall be kept current at all times by supplementary amendments via electronic process or such other process as the Corporation may prescribe to the original application. Such amendment to the application shall be filed with the Corporation not later than 30 days after learning of the facts or circumstances giving rise to the amendment. If such amendment involves a statutory disqualification as defined in Section 3(a)(39) and Section 15(b)(4) of the Act, such amendment shall be filed not later than ten days after such disqualification occurs.
Finally, the Form U4 asks the following:FINRA Rule 1122. Filing of Misleading Information as to Membership or RegistrationNo 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.
By failing to disclose the September 2007 Chase Bank judgment within 30 days ofthe event, Nagi violated Article V, Section 2(c) of the FINRA By-Laws of the Corporation, NASD Rule IM 1000-1, and NASD Rule 21 1 0. By failing to disclose the four judgments entered against him in 2009 through 201 1 when he knew that judgments were required to be disclosed, Nagi willfully violated Article V, Section 2(c) ofthe FINRA By-Laws of the Corporation, and FINRA Rules 1122 and 2010.Financial Disclosure14K. Within the past 10 years:(1) have you made a compromise with creditors, filed a bankruptcy petition or been the subject of an involuntary bankruptcy petition?(2) based upon events that occurred while you exercised control over it, has an organization made a compromise with creditors, filed a bankruptcy petition or been the subject of an involuntary bankruptcy petition?(3) based upon events that occurred while you exercised control over it, has a broker or dealer been the subject of an involuntary bankruptcy petition, or had a trustee appointed, or had a direct payment procedure initiated under the Securities Investor Protection Act?14L. Has a bonding company ever denied, paid out on, or revoked a bond for you?14M. Do you have any unsatisfied judgments or liens against you?
I understand that this settlement includes a finding that I willfully omitted to state amaterial fact on a Form U4, and that under Section 3(a)09)(F) ofthe SecuritiesExchange Act of 1934 and Article III, Section 4 of FINRA's By-Laws, this omissionmakes me subject to a statutory disqualification with respect to association with amember.
(39) A person is subject to a ‘‘statutory disqualification'' with respect to membership or participation in, or association with a member of, a self-regulatory organization, if such person-. . .(F) has committed or omitted any act, or is subject to an order or finding, enumerated in subparagraph (D), (E), (H), or (G) of paragraph (4) of section 15(b) of this title, has been convicted of any offense specified in subparagraph (B) of such paragraph (4) or any other felony within ten years of the date of the filing of an application for membership or participation in, or to become associated with a member of, such self- regulatory organization, is enjoined from any action, conduct, or practice specified in subparagraph (C) of such paragraph (4), has willfully made or caused to be made in any application for membership or participation in, or to become associated with a member of, a self-regulatory organization, report required to be filed with a self-regulatory organization, or proceeding before a self-regulatory organization, any statement which was at the time, and in the light of the circumstances under which it was made, false or misleading with respect to any material fact, or has omitted to state in any such application, report, or proceeding any material fact which is required to be stated therein.