According to FINRA, Garrett Caplin was barred from association with any FINRA member in all capacities on March 15, 2022, for failing to produce information and documents requested by FINRA during an investigation.

FINRA initiated the investigation into circumstances that led to two Form U5 amendments filed by Caplin's former member firm. The first amendment disclosed that Caplin was under internal review concerning his due diligence efforts for opening a customer account. The second amendment indicated the review concluded and found that suspicious aspects of a note issuer were not escalated to the firm prior to bonds being transferred to it, and that Caplin's due diligence of the end customer was incomplete before account opening and receipt of bonds.

Despite FINRA's requests for information and documents related to these matters, Caplin failed to provide the requested materials. This prevented FINRA from fully investigating the circumstances surrounding the due diligence failures and potential red flags that were not properly escalated.

Due diligence is a critical component of customer protection. Before opening accounts or accepting securities transfers, firms and their representatives must conduct appropriate background checks to prevent money laundering, fraud, and other misconduct. The allegations that Caplin failed to complete proper due diligence and did not escalate suspicious circumstances raise serious investor protection concerns.

The obligation to cooperate with FINRA investigations exists independently of whether underlying violations occurred. Even individuals who believe they did nothing wrong must comply with information requests to allow regulators to complete their investigations.

This case illustrates that failing to participate in regulatory investigations will result in severe sanctions. The bar prevents Caplin from working in the securities industry, protecting investors from someone who refused to submit to regulatory oversight.