According to FINRA, Garrett Manning was fined $2,500 and suspended from association with any FINRA member in all capacities for three months for failing to obtain written consent from his firm to maintain outside securities accounts and for falsely attesting that he maintained no such accounts on compliance questionnaires.

When Manning joined a new firm, he informed the firm about an existing outside securities account he maintained at another firm. The new firm directed him to close the account, but despite this clear directive, Manning continued to maintain it until his firm asked for confirmation that it had been closed. This demonstrated a willful disregard for his firm's instructions.

Additionally, Manning opened a second outside securities account at yet another firm without obtaining his new firm's prior written consent, though he did properly disclose his association with his firm to the outside firm where he held the second account. Manning did not disclose the second account to his new firm until after FINRA inquired about his outside securities accounts during an investigation.

Making matters worse, Manning falsely attested on both firms' annual compliance questionnaires that he maintained no outside securities accounts. These false attestations prevented the firms from knowing about the accounts and supervising them appropriately.

FINRA rules require registered representatives to provide written notice to their employing firm before opening securities accounts at other firms. The firms must also be notified about the existence of such accounts. These requirements allow firms to supervise their representatives' securities activities, monitor for conflicts of interest, and ensure compliance with industry rules.

The violations here are aggravated by several factors. First, Manning was explicitly directed to close his original outside account but defied that instruction. Second, he opened a second outside account without permission. Third, he provided false information on compliance questionnaires, actively concealing the accounts rather than simply failing to disclose them. Fourth, he only disclosed the second account after FINRA began investigating, suggesting he would have continued concealing it otherwise.

The relatively moderate sanctions—a $2,500 fine and three-month suspension—may reflect that Manning did eventually disclose the accounts and there is no indication he used them for improper purposes. However, the violations demonstrate a pattern of disregard for firm instructions and compliance obligations.

Investors should be concerned when representatives maintain outside accounts without firm knowledge, as this can be a red flag for selling away or other improper activities. While maintaining outside accounts is not inherently improper if properly disclosed, concealing such accounts and lying about them on compliance questionnaires demonstrates dishonesty that should concern investors.