According to FINRA, Oshima & Associates was censured and fined $10,000 on July 5, 2024, for maintaining inaccurate books and records by mismarking transactions as "unsolicited" when they were, in fact, "discretionary."

This violation relates to the fundamental requirement that broker-dealers maintain accurate books and records. The distinction between unsolicited and discretionary transactions is significant because it affects the level of regulatory scrutiny and the firm's supervisory obligations. Discretionary transactions occur when a broker has authority to make investment decisions without the customer's prior approval for each transaction, which requires specific written authorization and heightened supervision.

The firm was required to certify that it has remediated the issues identified and implemented a reasonably designed supervisory system, including written supervisory procedures. Accurate record-keeping is essential for regulatory oversight and investor protection, as it allows regulators to monitor trading activity and ensure that firms are properly supervising discretionary accounts.

Investors should understand the difference between discretionary and non-discretionary accounts. In a discretionary account, the broker has authority to buy and sell securities without asking permission for each trade. This requires a high level of trust and proper documentation. Investors should regularly review their account statements to ensure that all transactions were properly authorized and that their account is being handled according to their agreement with the firm.