FINRA Sanctions Axos Invest LLC for Reg BI Failures
According to the Financial Industry Regulatory Authority (FINRA), the self- regulator has reportedly censured and fined Axos Invest LLC $75,000 for regulatory issues. FINRA is the self regulator who oversees brokers and brokerage firms. From June 30, 2020, to February 6, 2023, Axos Invest LLC allegedly falsely responded “No” to the question on the firm’s customer relationship summary (Form CRS) concerning legal or disciplinary history, according to the Letter of acceptance, waiver and consent. The firm was allegedly required to respond “Yes,” because a control affiliate of the firm, and two of the firm’s registered representatives, had prior legal or disciplinary history.
By filing and delivering to customers two versions of its Form CRS with inaccurate information, Axos Invest LLC purportedly “willfully violated” Section 17(a)(1) of the Securities Exchange Act of 1934, Exchange Act Rule 17a-14, and FINRA Rule 2010, according to the Letter of Acceptance Waiver and Consent.
This matter originated from a FINRA cause examination. According to public disclosures on FINRA’s website, the self-regulator has reportedly sanctioned Axos Invest and four other firms this week for Form CRS failures.
Form CRS and Regulation Best Interest
Regulation Best Interest (REG BI), a regulation that calls for brokers to act in the best interest of their clients when making investment recommendations, was approved in 2019.
The rule includes Form CRS relationship summary which provides customers with information about the types of services the firm offers; the fees, costs, conflicts of interest, and required standard of conduct associated with those services; whether the firm and its investment professionals have reportable legal or disciplinary history; and how to get more information about the firm. Form CRS also includes required “conversation starters” to help begin a discussion with a broker-dealer about the relationship, including their services, fees, costs, conflicts, and disciplinary information.
According to public disclosures on FINRA’s website, the self-regulator has reportedly sanctioned five firms including Axos Invest LLC this week for Form CRS failures. See FINRA ups its Game with Reg BI Enforcement
FINRA Rule 2010
FINRA Rule 2010 is a broad ethical principle that requires all FINRA member firms and their associated persons to observe high standards of commercial honor and just and equitable principles of trade. It is known as the “Standards of Commercial Honor and Principles of Trade” rule.
The rule is designed to promote ethical conduct and fair dealing in the securities industry. It covers a wide range of activities, including the solicitation, sale, and execution of securities transactions, as well as the handling of customer accounts and the dissemination of investment recommendations.
Securities Fraud Attorneys
If you are concerned about your investments with your broker or financial advisor, please call the White Law Group 1-888-637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.
Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.
With over 30 years of securities law experience, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions attempt to recover their investment losses. For more information, please visit our website, www.whitesecuritieslaw.com.
Tags: Axos Invest LLC, finra sanctions, Form CRS, Reg bi Last modified: May 23, 2023