Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
CASES OF NOTE
2012
NOTE: Stipulations of Fact and Consent to Penalty (SFC); Offers of Settlement (OS); and Letters of Acceptance Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.
MML Investors Services, LLC
AWC/2010020873501
MML Investors Services failed to timely file Forms U5 and amendments to Forms U4 and U5. 

The firm’s failure to comply with its reporting obligations may have hampered the investing public’s ability to assess the background of certain brokers through FINRA’s public disclosure program, rendered certain information unavailable to member firms making hiring determinations, may have reduced the ability of state securities regulators to review applications by brokers to transfer firms, and hindered FINRA from promptly investigating certain disclosure items.

The firm’s supervisory system and procedures were not reasonably designed to achieve compliance with the reporting requirements of Article V of FINRA’s By-Laws. The firm failed to enforce the written procedures it had adopted to prevent late disclosures to FINRA. The firm did not enforce a sanctions policy for late filings of Forms U4 and U5 that it had implemented. That firm policy was updated to strengthen the sanctions for late disclosures to the firm. There were numerous instances of late filings in which the firm either failed to issue a letter of warning to the representative or failed to fine the representative as called for by its procedures. Although the firm’s procedures called for the termination of any representative who failed to timely disclose three reportable events to the firm, it did not terminate at least two such representatives. There were also instances in which the firm failed to sanction supervisors as called for by its procedures. 
MML Investors Services, LLC: Censured; Fined $300,000; Required to * review its supervisory systems and WSPs for compliance with its reporting obligations concerning the timely filing of Uniform Application for Securities Industry Registration or Transfer (Form U4) disclosure amendments and the timely filing of Uniform Termination Notices for Securities Industry Registration (Forms U5) and Form U5 amendments, * certify in writing to FINRA within 90 days of the issuance of the AWC that the firm currently has in place systems and procedures reasonably designed to achieve compliance with its reporting obligations under FINRA’s By-Laws, Article V, 11 January 2012 Sections 2(c), 3(a) and 3(b) with respect to the timely filing of required Forms U4 and U5, and amendments thereto; * within 15 days following the end of each quarter in calendar year 2012, the firm will submit a report to FINRA detailing any Form U5 filings or disclosure amendments to Forms U4 and U5 that were not timely filed with FINRA that quarter, and an officer of the firm will certify in writing to FINRA that the submitted report is accurate.
Tags: WSPs    
Bill Singer's Comment
An interesting and detailed requirement concerning ongoing U5 reporting compliance.
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