According to FINRA, MMA Securities LLC (CRD #44254), based in New York, New York, was censured, fined $30,000, and required to certify remediation of the issues identified in a Letter of Acceptance, Waiver and Consent (AWC) issued on January 5, 2024.

FINRA found that MMA Securities failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with rules governing outside business activities (OBAs). Outside business activities refer to work that a registered representative performs outside the scope of their relationship with their employing broker-dealer. FINRA Rule 3270.01 requires firms to evaluate and document their assessment of these activities to protect investors from potential conflicts of interest.

Specifically, FINRA found that MMA Securities failed to evaluate and document its evaluation of OBAs disclosed by its registered representatives. The firm approved OBAs without properly assessing whether the activities would interfere with or compromise the registered person's responsibilities to the firm or its customers, or whether the activities could be viewed as part of the firm's business. Additionally, the firm did not evaluate whether outside activities should be restricted or prohibited, or whether they should be treated as outside securities activities with transactions recorded on the firm's books and records.

Without admitting or denying the findings, MMA Securities consented to the sanctions and the entry of findings. The firm was also required to implement a supervisory system reasonably designed to achieve compliance with FINRA Rule 3270.01 going forward.

This case serves as an important reminder for investors about the significance of outside business activity oversight. When brokers engage in activities outside their primary employment, there is a risk that those activities could create conflicts of interest or divert attention from their obligations to clients. Firms are expected to have robust procedures in place to review and monitor these activities. Investors should be aware that they have the right to know about their broker's outside activities and should ask questions if they have concerns. Checking a broker's record through FINRA's BrokerCheck tool can reveal disclosed outside business activities and help investors make more informed decisions about who manages their money.