According to FINRA, three affiliated Cetera entities—Cetera Advisors LLC, Cetera Investment Services LLC, and Cetera Wealth Services, LLC (formerly Cetera Advisor Networks LLC)—were censured and fined a combined $1,100,000 in January 2026 for failing to establish supervisory systems adequate to prevent potential unregistered securities sales and money laundering activity, and for related supervisory and record-keeping failures involving consolidated financial reports sent to customers.FINRA found that the firms' supervisory systems were not reasonably designed to achieve compliance with Section 5 of the Securities Act of 1933, which prohibits the sale of unregistered securities. Before April 2021, the firms did not require registered representatives to complete questionnaires for electronic deposits of low-priced securities, even though most such securities arrived electronically. As a result, the firms allowed customers to deposit and sell millions of shares of low-priced securities and wire out the proceeds without detecting or reasonably investigating red flags that could have signaled unregistered distribution activity.The firms' anti-money laundering (AML) compliance programs were also found deficient. Their written policies and procedures required monthly reviews of low-priced securities deposits and transactions but provided no guidance on how to identify suspicious transactions. There was no mechanism for monitoring the specific red flags associated with suspicious activity in low-priced securities, leaving the firms without a functional framework for detecting and reporting potentially suspicious conduct as required by the Bank Secrecy Act.Additionally, Cetera Advisors failed to reasonably supervise the creation and dissemination of consolidated reports—documents that aggregate a customer's total financial picture across multiple accounts. The firm's procedures required representatives to verify any manually entered data, but supervisors were not required to confirm compliance. The firm also failed to address consolidated reports sent through its proprietary system, third-party vendor platforms, or custom templates created by representatives. As a result, tens of thousands of consolidated reports sent to customers were neither reviewed nor retained as required by Exchange Act Rule 17a-4(b)(4).For investors, this case illustrates two important themes. First, low-priced securities—often called penny stocks—carry elevated risks of fraud and manipulation, and firms have a duty to scrutinize deposits and sales of these securities. Second, consolidated reports can provide a misleading view of a customer's finances if they contain inaccurate manually entered data and go unreviewed. Investors should ask their broker how consolidated reports are prepared, verified, and supervised.