According to FINRA, Brian Keith Shey was fined $5,000 and suspended for four months for willfully failing to amend his Form U4 to disclose four felony charges.

The State of Florida charged Shey with two felony counts of submitting a false insurance application and two felony counts of submitting a fraudulent insurance claim. Shey was aware of the felony charges but failed to amend his Form U4 within 30 days or at any point during his association with his member firm. The charges were later dismissed.

Form U4 disclosure requirements exist to ensure transparency about the backgrounds of registered persons. Even if criminal charges are later dismissed, they must be disclosed when they occur because they represent material information that firms and investors are entitled to know. The requirement to disclose within 30 days ensures that this information becomes available promptly rather than being hidden for months or years.

The fact that Shey was charged with insurance fraud - submitting false applications and fraudulent claims - is particularly concerning for someone in the financial services industry, as it suggests dishonesty and willingness to commit fraud for financial gain. While the charges were ultimately dismissed, Shey's failure to disclose them violated his obligation to be transparent about his background.

Investors should understand that registered persons must disclose criminal charges even if they are later acquitted or dismissed. This requirement exists because the charges themselves are material information. Investors can check FINRA BrokerCheck to review a financial professional's criminal and disciplinary history, including charges that were later dismissed. A pattern of failing to disclose required information is itself a red flag about a person's trustworthiness.