Undisclosed IRS Liens on Form U4 Result in FINRA Fine and Suspension

September 28, 2011

In response to a May 2, 2011,  Complaint filed by the Financial Industry Regulatory Authority's ("FINRA's") Department of Enforcement, and without admitting or denying the allegations, Respondent Thomas N. Razey submitted an Offer of Settlement (Offer) that was accepted by FINRA.FINRA Department of Enforcement, Complainant, v. Thomas N. Razey, Respondent (Offer of Settlement / 2009019013201, September 23, 2011)


During the relevant times, Razey was a registered person with Ameriprise Financial Services, Inc. (f/k/a American Express Financial Advisors, Inc.) and had no prior FINRA disciplinary history.

The Complaint alleged that on March 14, 2006, the Internal Revenue Service (IRS) filed a $60,775.19 lien against Razey for unpaid 1998 through 2004 income taxes, and that he received the notice at his home address about the same day.

Thereafter, on November 22, 2007, it was alleged that the IRS filed a $7,189.19 lien against Razey for unpaid 2005 income taxes, and that he received the notice at his home addrss about the same day.

U4 Disclosure

SIDE BAR: The Form U4 seeks a "yes" or "no" answer under "Financial Disclosure" to Item 14M: Do you have any unsatisfied judgments or liens against you?

Both the 2006 and 2007 IRS liens were required to be disclosed on Razey's Form U4 as material events. Notwithstanding, the Complaint alleged that Razey failed to disclose the liens until July 31, 2009, and only after his employer received an anonymous tip about the tax issues.

FINRA deemed the failure to disclose the liens on his U4 as violations by Razey of NASD Conduct Rule 2110; IM-1000-1 and FINRA Rule 2010 , and imposed a $2,500 fine and 30 business day suspension upon Razey.

For a similar case, READ:

FINRA Hits ING Brokers For Untimely U4 Lien Disclosures (Street Sweeper, September 8, 2011)