FINRA fines firm $40,000 for municipal securities rule violations

The Financial Industry Regulatory Authority fined United First Partners $40,000 for municipal securities-related rule violations as part of a wider FINRA disciplinary action that saw the firm fined a total of $215,000.

In addition to the firm's fine, Elizabeth Dickerson, UFP's chief compliance officer, was fined $5,000, according to a settlement document dated March 24. UFP and Dickerson accepted and consented to FINRA's findings without admitting or denying them, the document said.

UFP's main business is providing brokerage and research services to institutional customers, according to the document, which detailed FINRA's findings. The firm has been in business since 2010, according to FINRA records, and is relatively small with 25 registered representatives at a single branch office in New York City.

The firm from July 2019 through June 2024 failed to report any of its municipal transactions to the Municipal Securities Rulemaking Board's Real-time Transaction Reporting System nor did it arrange for any other entity to report those trades on the firm's behalf, FINRA alleged. Consequently, the firm violated MSRB Rule G-14, FINRA said.

Rule G-14 requires the reporting of transactions to the RTRS, generally within 15 minutes of execution.

FINRA also alleged that UFP's written supervisory procedures failed to address the firm's RTRS reporting obligation and the firm did not otherwise conduct any supervisory review relating to RTRS reporting. As a result, UFP violated MSRB Rule G-27, FINRA said.

Rule G-27 requires firms to maintain and enforce written supervisory procedures "reasonably designed" to ensure compliance with all applicable laws and regulations.

In addition to the MSRB rule violations the firm committed, FINRA found that UFP and Dickerson committed a variety of FINRA violations. Notably, FINRA found the firm failed to set up and maintain policies and procedures reasonably designed to restrict the flow of information between its research department and sales and trading personnel so as to keep sales and trading department personnel from using non-public advance knowledge of research reports to their advantage.

The firm and Dickerson also failed to set up and maintain "policies and procedures reasonably designed to identify and effectively manage conflicts of interest relating to the preparation of research reports and to establish information barriers or other safeguards between research personnel and sales and trading personnel," the document said.

In addition to the $5,000 fine, Dickerson also received a one-month principal capacity suspension.

Efforts to reach UFP and Dickerson for comment by phone and via the firm's website on Wednesday were unsuccessful.