According to FINRA, Axos Invest LLC was censured and fined $75,000 for willfully violating Section 17(a)(1) of the Securities Exchange Act by filing and delivering to customers two versions of its Form CRS containing inaccurate information about legal or disciplinary history.

The firm falsely responded "No" to the question concerning legal or disciplinary history on both its initial and amended Form CRS. At the time the firm filed its initial Form CRS, a control affiliate and one registered representative had prior legal or disciplinary history. When the firm filed its amended Form CRS, the affiliate and two registered representatives had such history.

The control affiliate had been subject to 13 disciplinary actions with findings for serious violations including: failing to file Suspicious Activity Reports relating to low-priced securities deposits and sales; failing to develop and implement an adequate anti-money laundering program; failing to provide customers with margin interest rate disclosures; and failing to comply with Regulation SHO's close-out requirements for short sales. The firm had already disclosed the affiliate's disciplinary history on its Form BD before filing Form CRS.

Additionally, regulatory disclosures reflecting registered representatives' legal or disciplinary history had been made by or were available to the firm in FINRA's Central Registration Depository and BrokerCheck before the firm filed these Forms CRS.

Following FINRA's investigation, the firm updated its Form CRS to respond "Yes" to the question concerning legal or disciplinary history. This case underscores the importance of accurate regulatory disclosures. Form CRS is specifically designed to provide retail investors with clear information about a firm's background, including disciplinary history, so they can make informed decisions. Investors should verify information in Form CRS against FINRA BrokerCheck records.