All Along the Watchtower FINRA Defends Against the Invading Notaries

FINRA Rule 3270: Outside Business Activities of Registered Persons

No registered person may be an employee, independent contractor, sole proprietor, officer, director or partner of another person, or be compensated, or have the reasonable expectation of compensation, from any other person as a result of any business activity outside the scope of the relationship with his or her member firm, unless he or she has provided prior written notice to the member, in such form as specified by the member. Passive investments and activities subject to the requirements of Rule 3280 shall be exempted from this requirement.

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.01 Obligations of Member Receiving Notice. Upon receipt of a written notice under Rule 3270, a member shall consider whether the proposed activity will: (1) interfere with or otherwise compromise the registered person's responsibilities to the member and/or the member's customers or (2) be viewed by customers or the public as part of the member's business based upon, among other factors, the nature of the proposed activity and the manner in which it will be offered. Based on the member's review of such factors, the member must evaluate the advisability of imposing specific conditions or limitations on a registered person's outside business activity, including where circumstances warrant, prohibiting the activity. A member also must evaluate the proposed activity to determine whether the activity properly is characterized as an outside business activity or whether it should be treated as an outside securities activity subject to the requirements of Rule 3280. A member must keep a record of its compliance with these obligations with respect to each written notice received and must preserve this record for the period of time and accessibility specified in SEA Rule 17a-4(e)(1).

From January 2018 through June 2019, while registered through LPL, Riccio was a notary public and provided notary services to firm customers. During that same time period, Riccio also provided notary and Medicaid application preparation services to the mother of a former customer and received approximately $3,600 in compensation for those services. LPL's written supervisory procedures required registered representatives to provide written disclosure of all outside business activities and receive written approval from the firm. Riccio did not provide written notice to LPL seeking approval of his notary or Medicaid application preparation services as outside business activities. Additionally, Riccio provided a false and misleading compliance attestation to LPL because he did not disclose his notary services as an outside business activity.¹

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Footnote 1: Riccio's false attestation was submitted prior to his performing Medicaid application preparation services.

Overview

Notaries Public are "commissioned" (i.e., licensed) by the Secretary of State. Notarial functions include:

• administering oaths and affirmations;
• taking affidavits and depositions;
• receiving and certifying acknowledgments or proof of such written instruments as deeds, mortgages and powers of attorney; and;
• demanding acceptance or payment of foreign and inland bills of exchange, promissory notes and obligations in writing, and protesting the same for non-payment

Many banks, law offices and other institutions which deal in financial or real property transactions employ individuals who are commissioned as Notaries Public. It is the responsibility of licensees to understand the Notary Public Law.

Term is commission is four years

• FINRA
• AWC
• OBA
• Rule 3270
• Notary
• BrokeAndBroker
• Bill Singer