According to FINRA, James Samuel Hanson was fined $5,000 and suspended for eight months for willfully failing to amend his Form U4 to disclose that he had been charged with sixteen felonies.

Hanson was arrested, indicted by a grand jury on sixteen felony charges, and arraigned - all while he was associated with his member firm. Although Hanson was aware that he had been charged with these felonies, he never amended his Form U4 to disclose the felony charges and never disclosed them to his firm. The firm later discovered the felony charges independently and discharged Hanson.

Form U4 is the Uniform Application for Securities Industry Registration that contains information about a person's background, including criminal charges and convictions. Investors and firms rely on Form U4 information to make informed decisions about who they work with and who they employ. The requirement to promptly disclose criminal charges exists so that firms can evaluate whether the person should continue in their position and so that investors have access to material information about their financial professional's background.

Hanson's willful failure to disclose sixteen felony charges for an extended period deprived his firm of information needed to make employment decisions and deprived investors of information they were entitled to know about. The fact that these were felony charges - serious criminal allegations - makes the failure to disclose particularly egregious.

Investors should regularly check their financial professional's background through FINRA BrokerCheck, which contains information from Form U4 filings including criminal charges and disciplinary history. When a broker fails to disclose criminal charges, it raises serious questions about their honesty and integrity. This case demonstrates why accurate and timely disclosure is so important for investor protection.