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  1. #1
    Join Date
    Apr 2009
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    14

    Default Violating a Compliance Code of Conduct at Brokerage Firm - What Are the Impacts

    Currently one of my friend is working at brokerage firm and every year employees are given with set of compliance questions as a mandatory training which needs to be completed. Unfortunately, my friend who is an employee of the firm has misdeamenor in his history (he didnot updated to the brokerage firm compliance team as he was worried about his job position) and now he has to face the compliance training questions which are mandatory.

    I would like to know, what happens if he gives a false information to those compliance questions? For ex: the question is something like this.

    Have you had misdeamenor or felony in this past year?

    Answer: If we give No to the above question, what happens?

    Whether the firm does a revalidation/crosscheck/background check of all the answers provided by the employees of the company? Please answer if anyone of you know, or direct me to the right forum/group if this is not the right place...Friend is worried and tensed what to answer, whether he should agree and disclose what had happen or answer No and wait with his fingerscrossed?

  2. #2
    Join Date
    Apr 2007
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    Il.(near StL,Mo.)
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    5,252

    Default Re: Violating a Compliance Code of Conduct at Brokerage Firm - What Are the Impacts

    Your friend needs to answer all questions truthfully. If he doesn't & the co. finds out, he most likely will be fired for sure. Employers do not like it when people lie.

  3. #3
    Join Date
    Apr 2009
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    14

    Default Re: Violating a Compliance Code of Conduct at Brokerage Firm - What Are the Impacts

    Complaince training question was like this:
    I have never been barred, suspended or enjoyed from acting as a registered person or investment advisor or from association with a broker dealer or member of a self regulatory organisation such as FINRA. I have not been convicted of a felony or a misdeamenor with in last 10yrs that has not already been reported on my U4 form.

    Im just relooking at this question and have a doubt that, whether this question is related to FINRA law violations or general state law violations. As my friend has a misdeamenor for violating a state law and nothing related to brokerage FINRA or SEC laws...Do he has to disclose this? Can someone help me understanding the above compliance training question in relates to the concern my friend has??Greatly appreciated if someone can help me in understanding if brokerage firms do background check every year for their employees?Does state law violation (misdeamenor) falls under FINRA law?

  4. #4
    Join Date
    Jun 2006
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    Massachusetts
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    Default Re: Violating a Compliance Code of Conduct at Brokerage Firm - What Are the Impacts

    It doesn't matter what it is related to unless the question limits itself.

    If the question is, have you ever had a conviction, then the answer is yes.

    If the question is, have you ever had a conviction related to FINRA or SEC laws, and he was not convicted of anything related to FINRA or SEC laws, then he can say no.

    If he answers the question in any way but literally and truthfully, he runs the risk of being fired out of hand if found out. He should not assume that the question means anything but exactly what it says. Ever means ever - it does not mean 7 years or 10 years or 5 years or 20 years - it means ever. If they only want to know about 7 years or 10 years or whatever, then they'll say that. If they only want to know about convictions related to FINRA or SEC laws, then they'll say that.

  5. #5
    Join Date
    Apr 2009
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    14

    Default Re: Violating a Compliance Code of Conduct at Brokerage Firm - What Are the Impacts

    Thanks cbg, so that question means they want to know about the convictions related to FINRA or SEC laws?

  6. #6
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    Jun 2006
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    Massachusetts
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    24,181

    Default Re: Violating a Compliance Code of Conduct at Brokerage Firm - What Are the Impacts

    Does the question SAY that they are only interested in convictions related to FINRA or SEC law?

    If the words, "you need only relate convictions related to FINRA or SEC law" or some like variation do not appear, then you must assume that they are NOT limited to that and you must relate ANY conviction. I don't know how to make it any plainer than that.

  7. #7
    Join Date
    Apr 2009
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    14

    Default Re: Violating a Compliance Code of Conduct at Brokerage Firm - What Are the Impacts

    I understood..thanks cbg.

    If my friend discloses the conviction, what are the impacts?
    How do the client (brokerage firm) reacts to these kind of convictions?

  8. #8
    Join Date
    Jun 2006
    Location
    Massachusetts
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    Default Re: Violating a Compliance Code of Conduct at Brokerage Firm - What Are the Impacts

    That's entirely up to the specific employer.

    If he is honest about the conviction, he may or may not keep his job.

    If he is not honest about it and the employer ever finds out (which is far easier than you might expect) he will be out on his ear so fast the seat of his pants will be smoking.

    Many employers will forgive a mistake that the employee is honest about and appears to have learned from. Few if any will forgive being lied to.

  9. #9
    Join Date
    Apr 2009
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    14

    Default Re: Violating a Compliance Code of Conduct at Brokerage Firm - What Are the Impacts

    Thanks guys..Here is the ending of the story..

    My friend have honestly informed his employer about what has happened and they took necessary actions to exclude him from the compliance constraints...

    If anyone is going under the same situations, i would suggest to disclose honestly about what has happened and leave the decision in employers hands but dont lie or give the false information (this will lead to your job loss)

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