According to FINRA, MML Investors Services, LLC was censured and fined $250,000 for failing to timely amend associated persons' Forms U4 and U5 to report disclosable events.

The firm failed to timely report customer complaints and arbitrations, complaint dispositions, criminal charges, bankruptcies, internal reviews and investigations, and regulatory actions. Disclosure delays ranged from three days to over 1,100 days after the firm received notice of reportable events.

FINRA found the firm's procedures were not reasonable to ensure effective communication among the firm's departments concerning events that may warrant disclosure. The firm's system for updating previously reported customer complaints and arbitrations led to over a dozen late filings. The firm relied partly on a shared email address where employees could provide updates regarding complaint and arbitration dispositions to the regulatory reporting team. This system depended on employees in other departments to timely communicate updates, and the regulatory reporting team would run searches to identify relevant updates. However, this process was not memorialized in procedures and lacked a set cadence for searches.

The firm has since recognized these deficiencies and revised its supervisory system. It implemented a new third-party vendor system designed to improve interdepartmental communication of reportable events.

This case demonstrates the importance of timely regulatory disclosures, which are critical for transparency in the securities industry. Public disclosure of disciplinary events, customer complaints, and other regulatory matters helps investors make informed decisions when selecting financial professionals. Investors should regularly check FINRA BrokerCheck to review their financial advisor's disclosure history and verify that all reportable events are properly disclosed.