FINRA has hit Citizens Securities with a $300,000 fine for allegedly failing to promptly disclose customer complaints and other reportable events on its reps' Forms U4 and U5.
The regulator scolded Citizens for not amending the forms within 30 days of learning of 45 customer complaints and settlements. It also criticized Citizens for not disclosing within the required 30-day window the outside business activities and bankruptcies that 22 reps had reported on their annual compliance questionnaires.
Forms U4 and U5 must be kept current at all times, FINRA reminded the firm in its disciplinary filing.
The alleged failings occurred from January 2010 through June 2016, FINRA said.
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The sales mix for the wealth management business is shifting from commission-based to more fee-based products, which hurts revenue in the short term.
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The bank's digital investing service will be available online and by mobile phone through a partnership with robo adviser SigFig.
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The bank's heavy concentration of mass-affluent customers gives it a strong advantage over its rivals, Citizens claims.
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The regulator also reprimanded Citizens for neglecting to implement an adequate supervisory system to ensure that customer complaints and settlements were reflected on reps' disclosure forms. The individuals who were responsible for reviewing complaints lacked sufficient training, FINRA claimed.
The regulator also took Citizens to task for not ensuring that the annual compliance questionnaires filed by reps were reviewed in a timely manner.
In its settlement with FINRA, Citizens neither admitted nor denied the charges but consented to an entry of FINRA's findings.
“We are pleased this matter has been resolved," Lauren DiGeronimo, a spokeswoman for Citizens, said in an email.
In addition to paying a $300,000 fine, Citizens agreed to a censure.
