According to FINRA, Independent Financial Group, LLC was censured and fined $100,000 for permitting a registered representative to continue associating with the firm during the period of his suspension when he was statutorily disqualified.

The violation arose when a registered representative was suspended by FINRA from associating with any FINRA member in all capacities. The AWC (Acceptance, Waiver and Consent) document instituting the suspension explicitly stated that the suspension would make the representative "subject to a statutory disqualification," meaning "he may not be associated with any FINRA member in any capacity, including clerical or ministerial functions, during the period of the suspension."

Despite this clear prohibition, Independent Financial Group permitted the representative to continue associating with the firm by entering securities orders through both the trading desk and electronic system of its clearing firm.

This is a serious violation. FINRA suspensions exist to protect investors by temporarily removing individuals who have engaged in misconduct from the securities industry. When firms permit suspended individuals to continue operating, they undermine this important investor protection mechanism.

Firms have an obligation to monitor the registration status of their associated persons and ensure that suspended or barred individuals do not engage in securities activities. This includes implementing controls to prevent suspended individuals from accessing trading systems.

For investors, this case underscores the importance of verifying the registration status of any individual who handles your securities transactions. You can check an individual's status, including any disciplinary history or current suspensions, through FINRA's BrokerCheck system at brokercheck.finra.org.

If you discover that a suspended individual has been handling your account, you should immediately contact the firm's compliance department and consider filing a complaint with FINRA.