FINRA censured and fined First Financial Equity Corporation of Scottsdale, Arizona $200,000 for failing to timely file amendments disclosing certain financial events such as judgments, failure to supervise, and for failing to prepare annual reports.
In AWC #2017055723502, FINRA wrote that First Financial Equity Corp (FFEC)'s failure to timely disclose 71 outstanding liens, judgments, bankruptcies, and credit compromises added up to approximately $1.4 million in outstanding judgments and liens.
Digging deeper, FINRA concluded that the firm failed to supervise the process through which the aforementioned disclosure takes place, writing that the firm's Chief Compliance Officer Melissa Strouse failed to keep Form U-4s accurate and current.
In September 2019, FINRA sanctioned FFEC CCO Strouse (CRD #3200452) for failing to update the forms and for failing to prepare two required annual reports for senior management regarding supervisory controls. FINRA also sanctioned FFEC for failing to prepare those annual reports, known as the Supervisory Controls and CEO Certification reports regarding compliance with written policies and written supervisory procedures.
Failing to disclose financial events can prove problematic due to potential conflict-of-interest or suitability concerns.
For instance, FFEC broker John Evan Schooler (CRD #2368308) of the firm's San Diego, California branch enjoys a BrokerCheck file with 27 disclosures, including 25 settled customer disputes as well as a financial compromise.
The disputes against Schooler, which total over $1 million in settlements, included allegations of failure to supervise, unsuitable investment, breach of contract, breach of fiduciary duty, and negligence at his prior firm, WFP Securities.
If you have invested with First Financial Equity Corporation or with any broker or financial adviser whose failure to disclose financial events or whose unsuitable recommendations have proven harmful to your investments or interests, 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.