According to FINRA, James R. Dickie was suspended from association with any FINRA member in all capacities for eight months (with no monetary sanctions due to financial status) for receiving $9,000 from a customer as part of a business transaction without seeking or obtaining his member firm's written pre-approval to engage in an outside business activity or to accept money from a customer, and for willfully failing to timely amend his Form U4 to disclose that he had been charged with felonies.

Dickie received the $9,000 from a firm customer as an investment intended to finance the renovation of a car. This transaction implicated multiple rules. First, outside business activity rules require representatives to obtain written approval before engaging in business activities outside their employment, particularly when those activities involve customers and compensation. Second, accepting money from customers for personal business ventures creates conflicts of interest and risks confusing customers about whether transactions are protected by firm supervision. Dickie did not seek or obtain approval for this activity and did not inform the firm of the transaction, despite signing biannual compliance questionnaires affirming he had informed his supervisory principal of all outside business activities.

The Form U4 violations are equally serious. Dickie was charged with several felonies but failed to disclose these charges on his Form U4 at any point. Form U4 requires disclosure of felony charges because they are material to assessing an individual's fitness to work in the securities industry. When the firm later filed a Form U4 amendment on Dickie's behalf, he falsely answered the question asking whether he had ever been charged with any felony. Neither Dickie nor the firm filed subsequent amendments to correct this misstatement. Ultimately, Dickie pled guilty to misdemeanor charges and the felony charges were dismissed, but his failure to disclose the charges when they were pending constituted a material misrepresentation.

Dickie also signed biannual compliance questionnaires falsely affirming that there were no events requiring amendments to his Form U4, when in fact the undisclosed felony charges should have been reported. For investors, this case illustrates the importance of checking financial professionals' backgrounds through FINRA's BrokerCheck system. Form U4 disclosures are critical to informed decision-making about whom to trust with investment assets. Representatives who fail to disclose criminal charges or who engage in undisclosed business activities with customers demonstrate a lack of transparency that should concern any investor. The fact that Dickie ultimately pled to misdemeanors rather than felonies does not excuse his failure to disclose the charges when they were pending.