FINRA Sanctions DMK Advisor Group, Inc. for Reg BI Failures   

According to a Letter of Acceptance, Waiver and Consent, from June 30, 2020, to June 15, 2022, DMK Advisor Group allegedly failed to establish, maintain, and enforce a supervisory system, including WSPs, reasonably designed to achieve compliance with Exchange Act Rule 17a-14. The firm reportedly failed to deliver its Form CRS to certain of its customers until October 2022.

DMK Advisor Group allegedly willfully violated Section 17(a)(1) of the Exchange Act and Rule 17a-14 and FINRA Rules 3110 and 2010, according to the letter. The firm also purportedly failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures, designed to achieve compliance with Regulation Best Interest or Reg BI. 

Regulation Best Interest and Form CRS 

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 the new 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. The compliance date for Form CRS was June 30, 2020. 
 
This matter originated from a FINRA cause examination. According to public disclosures on FINRA’s website, the self-regulator has reportedly sanctioned DMK Advisor Group and four other firms this week for Form CRS failures. See FINRA ups its Game with Reg BI Enforcement  

Failure to Supervise  -DMK Advisor Group

FINRA Rule 3110 requires member firms to establish, maintain, and enforce a supervisory system, including WSPs, reasonably designed to achieve compliance with applicable securities laws, regulations, and FINRA rules. The rule helps prevent and detect violations of securities laws and regulations. FINRA Rule 3110 continually requires firms to designate a principal to supervise and conduct regulatory reviews of the systems’ effectiveness. A violation of Exchange Act § 17(a)(1), Exchange Act Rule 17a-14, and FINRA Rule 3110 also is a violation of FINRA Rule 2010, which requires member firms to observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business.   

 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.