Finra says it has censured and fined a member firm for alleged failures in conducting research on its new hires’ backgrounds.
From March 2014 through April 2017, Infinity Financial Services allegedly lacked a supervisory system reasonably designed to make sure that it did background checks on its new hires, including a review of their disciplinary histories, financial circumstances and qualifications, the industry’s self-regulator says in a letter of acceptance, waiver and consent published last week.
When recruiting new registered representatives, Infinity allegedly turned to Google and Central Registration Depository disclosures made by prior employers, as well as a form for new hires asking them to indicate pending disciplinary actions, customer complaints, arbitrations, investigations and liens or judgements, Finra says. In addition, the industry’s self-regulator claims that Infinity didn’t contact its applicants’ former employers.
Finra claims that as a result of the failure, Infinity hired 16 registered representatives during the period in question without checking their CRD records and failed to find pending bankruptcies, judgments and tax liens for five of them.
In addition, from November 2016 through May 2017, Infinity allegedly grew its number of associated persons and branch offices beyond its membership agreement from 2013, without disclosing the information to Finra as required, the industry’s self-regulator says. The company had 41 associated persons and 36 offices in November 2013 and grew to 60 associated persons and 49 offices by May 2017, Finra says.
Infinity agreed to a censure and to pay a $35,000 fine, as well as to file a continuing membership application with Finra, without admitting or denying the findings, the industry’s self-regulator says.
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