According to FINRA, Kajie McMullen was barred from association with any FINRA member in all capacities on March 11, 2022, for failing to provide a complete response to FINRA's requests for information and documents.
FINRA initiated an investigation into the circumstances of McMullen's termination from her member firm. The firm had terminated her employment, and FINRA sought information to determine whether McMullen improperly applied for and used Small Business Administration grants and whether she failed to disclose outside business activities to her firm.
McMullen initially called FINRA and confirmed receipt of its request. She stated she did not have copies of some requested documents, including applications she submitted to the Small Business Administration. FINRA explained how she could obtain copies of those documents. Subsequently, McMullen provided a partial response through counsel but failed to provide the SBA applications, bank records, tax returns, or describe efforts to obtain the applications.
The requested information was necessary for FINRA to investigate potential misconduct involving improper use of government grants and undisclosed business activities. By failing to provide complete responses, McMullen obstructed FINRA's ability to investigate potentially serious violations.
The duty to cooperate fully with FINRA investigations is a cornerstone of the regulatory system. When individuals provide only partial responses or fail to make reasonable efforts to obtain requested documents, they undermine FINRA's ability to protect investors.
This case demonstrates that initial cooperation is not sufficient - individuals must provide complete responses to all requests and make reasonable efforts to obtain documents within their control. Partial compliance does not satisfy regulatory obligations.
For investors, FINRA's ability to investigate potential misconduct depends on obtaining complete and accurate information. When registered representatives obstruct investigations, they prevent regulators from uncovering violations that could harm investors.
