by Bill Singer
Lien on Me. FINRA Cites Two Brokers For Untimely Lien Disclosures on U4
September 8, 2011
For the purpose of settling alleged rule violations but without admitting or denying the findings, Respondent Thomas Salway and Respondent Curt J. High submitted separate Letters of Acceptance, Waiver and Consent ("AWC") to the Financial Industry Regulatory Authority ("FINRA") that the regulator accepted.
Cast of Characters
- Salway first became registered as a Series 6 in 1993, and during the relevant period of time from January 1996, until his termination in June 2010, he held Series 6, 63 and 65 registrations with ING Financial Partners, Inc. ("ING").
- High first became registered in 1990 as an Investment Company and Variable Contracts Products Representative and in 1991 as a General Securities Representative. During the relevant period of time from April 2008, until his termination in April 2010, High was registered as a General Securities Representative with ING.
Lien on Me
Salway
On January 6, 2010, the Internal Revenue Service ("IRS") filed a $45,645.79 federal tax lien against Salway. After ING discovered the tax lien and instructed him to undertake the amendment, Salway amended his Form U4 on April 5, 2010 (which FINRA alleged was a willful failure to timely amend). On two previous occasions, ING had disciplined Salway for failing to timely disclose tax lien information and update his Form U4 accordingly.
High
From September 5, 2006, through April 7, 2010, the IRS and Pennsylvania Department of Revenue filed four tax liens totaling about $285,000 against High for unpaid taxes for tax years 2006-2008. High received notice of the liens at his residential address between 2006 and 2008 when the liens were assessed. After ING discovered the existence of the liens in March 2010, High amended his Form U4 on April 8, 2010 (which FINRA alleged was a willful failure to timely amend).
FINRA Sanctions
By willfully failing to timely amend his Form U4 to disclose the tax lien, Salway violated FINRA Rule 1122: Filing of Misleading Information as to Membership or Registration and FINRA Rule 2010: Standards of Commercial Honor and Principles of Trade and was fined $5,000 and suspended for 60 days with any FINRA member in any capacity.
By willfully failing to timely disclose the unsatisfied tax liens, High violated NASD Rule 2110, FINRA Rules 1122 and 2010, and IM-1000-1 and was fined $5,000 and suspended for 3 months with any FINRA member in any capacity.
- In the Matter of Thomas Salway, Respondent (AWC/2010023439901, August 30, 2011)
- In the Matter of Curt J. High, Respondent (AWC/2010022448601, August 29, 2011)
Bill Singer's Comment
Although many aspects of Wall Street regulation are complicated, the issue of disclosing liens is about as simple and straightforward a proposition as exists. Item 14M of the Form U4 poses the following question, requiring a "yes" or "no" answer:
Do you have any unsatisfied judgements or liens against you?
Moreover, as noted in the two cases above, FINRA provides for up to 30 days from notice of the lien for registered persons to notify their firm and file the required disclosure on their Form U4. Notwithstanding such relative simplicity, the obligations and the mechanics bedevil many.