Previously disciplined for failing to supervise brokers at First Financial Equity Corporation, Melissa Ann Strouse, the firm's Chief Compliance Officer who worked out of FFEC's Scottsdale, Arizona and San Diego, California branches, added a new series of sanctions as she consented to FINRA's findings that she failed to timely update required industry forms pertaining to representatives at FFEC.
FINRA AWC #2017055723501 states that Melissa Strouse (CRD #3200452) failed to timely update Forms U4 to disclose 67 outstanding liens, judgment, bankruptcies, and compromises at the firm despite having received notice of these events, which totaled over $1 million.
In general, a stockbroker notifies their firm of any outstanding liens, judgments, bankruptcies, and other disclosable financial events, and the firm's compliance department ensures a Form U4 is filed with FINRA so these disclosures can be published for public consumption via avenues such as BrokerCheck and similar background services/databases.
It thus follows that if a firm CCO fails to timely update Forms U4 to indicate that a broker or series of brokers and reps has outstanding liens and/or other financial events, then FINRA may not receive knowledge of the disclosure, which means the public won't be able to learn of the potential skeletons in their broker's closet that could have a real effect on customer investments.
For instance, a stockbroker who is in financial trouble may be more apt to defraud a client, or steer a customer toward an unsuitable investment that happens to charge higher commissions and fees.
FINRA's report indicates that in addition to failing to timely update the Forms U4 to disclose 67 outstanding lien, judgment, bankruptcy, and compromise events, Strouse purportedly failed to prepare two required annual reports for senior management regarding supervisory controls.
FINRA previously fined and suspended Strouse for regulatory compliance and supervisory deficiencies.
Prior to that, in 2016, FINRA filed a compliant against Strouse regarding FFEC's ETF business and purported failure to supervise a registered representative who charged "problematic and excessive" commissions.
If you have invested with Melissa Ann Strouse, First Financial Equity Corporation, or with any FFEC broker or investment adviser whose undisclosed lien, bankruptcy, judgment, or other financial event has posed a conflict of interest that proved harmful to your financial interests due to unsuitable recommendations, excessive fees/commissions, or outright theft, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.