FINRA Statement on SEC Regulatory Action
Nancy Condon (202) 728-8379
WASHINGTON — The Financial Industry Regulatory Authority (FINRA) today issued the following statement from Richard Ketchum, FINRA Chairman and Chief Executive Officer, regarding a settlement between FINRA and the Securities and Exchange Commission (SEC) arising from documents produced during a 2008 SEC oversight examination of the Kansas City District Office. At issue was the alteration by the Director of the Kansas City office at the time, of three staff meeting minutes. Two of the meetings were conducted in 2006 and one was conducted in January 2007. The meetings occurred prior to the creation of FINRA by the consolidation in July 2007.
"As a regulator, FINRA must always hold itself to the highest standards. When we discover shortcomings, it is our obligation to take appropriate corrective action and make it clear that we have zero tolerance for actions that could compromise the integrity of our organization. We self-reported the Kansas City matter to the SEC and have fully cooperated with the agency's review. Following our own internal review we took decisive action, including appointing new leadership in our Kansas City office and instituting a number of changes that strengthened document-handling procedures across the organization. These strengthened procedures include additional online and live ethics training for all employees with an enhanced focus on document handling and integrity. An independent consultant will review these changes to determine if further improvements are warranted.
I am personally committed to taking all possible steps to ensure that this type of conduct does not reoccur. We have taken prompt action to report, investigate and discipline the behavior at issue in this matter. Under no circumstances will such conduct be tolerated at FINRA."
FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firms, writing rules, enforcing those rules and the federal securities laws, informing and educating the investing public, providing trade reporting and other industry utilities, and administering the largest dispute resolution forum for investors and firms. For more information, please visit www.finra.org.