SEC orders FINRA to improve internal compliance policies and procedures.
The Financial Industry Regulatory Authority (FINRA) agreed to settle civil charges of violating securities laws filed by the SEC.
FINRA, a self-policing brokerage group, agreed to hire an outside consultant and provide extra staff training as part of the deal to settle accusations of altering documents requested by SEC inspection staff, the SEC says.
The settlement was reached on Thursday and has been marked as the first of its kind by the SEC against FINRA. At the time of the alleged document alteration, in 2008, SEC chair Mary Schapiro was serving as chief executive of FINRA. But according to reports, FINRA did not learn about the unethical document practices until June 11, 2010, when a whistleblower complained.
In its action against FINRA, the SEC said the director of FINRA's Kansas City District Office in 2008 caused three records of staff meeting minutes to be doctored. The modifications made to the documents included deleting or editing certain information. In some cases, entire passages were removed or manipulated, the SEC said. Moreover, the author's signature on the documents was changed to the director, the agency added.
The SEC did not provide extensive details of the nature of the changes made.
