According to FINRA, James Daniel Kent Jr. was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for eight months for willfully failing to timely amend his Form U4 to disclose a felony charge and for failing to timely produce information and documents requested by FINRA.

Two days after being charged with a felony driving under the influence (DUI), Kent updated his Form U4 to disclose a past felony battery charge, but he did not disclose the new felony DUI charge at that time or at any time thereafter. This omission was particularly egregious because Kent affirmatively updated his Form U4 just two days after receiving the charge but chose not to disclose the new felony. This demonstrates intentional concealment rather than mere oversight.

Form U4 disclosure requirements exist to provide firms, regulators, and investors with complete information about a broker's background, including criminal charges and convictions. Felony charges are material information that employers and customers have a right to know because they may reflect on a person's trustworthiness and judgment. The requirement to disclose within 30 days ensures that this information is available promptly for appropriate supervision and customer protection.

Kent also failed to timely produce information and documents requested by FINRA during its investigation of his failure to disclose. This additional violation obstructed FINRA's ability to investigate the matter efficiently and compounded the original disclosure violation.

The eight-month suspension and the finding that Kent's failure was willful reflect the serious view FINRA takes of intentional nondisclosure. The term "willful" in securities law means intentional, not necessarily with intent to violate the law. Kent's updating of his Form U4 for an old charge while omitting the recent charge demonstrates knowledge of the disclosure obligation and intentional failure to comply.

This case reminds investors of the importance of checking their brokers' backgrounds through FINRA's BrokerCheck system. Investors have a right to complete and accurate information about their brokers' disciplinary history, criminal charges, and other background information.