According to FINRA, Sarvendra Harkishun was fined $2,500 and suspended from association with any FINRA member in all capacities for four months.

Harkishun failed to obtain his member firms' written consent before opening or continuing to maintain outside brokerage accounts in which securities transactions could be effected and in which he had a beneficial interest. He also certified in annual attestations to one firm that he had not opened any outside brokerage accounts for which the firm had not been notified, and certified to another firm that he had disclosed all accounts. Additionally, Harkishun failed to notify the financial institutions where he held the accounts of his associations with his firms.

The requirement that registered representatives disclose outside brokerage accounts to their firms serves several important purposes. It allows firms to monitor for potential conflicts of interest, insider trading, or other prohibited activities. It also enables firms to supervise representatives' personal trading to ensure they are not engaging in excessive trading, market manipulation, or other problematic conduct. Without knowledge of these accounts, firms cannot fulfill their supervisory obligations.

Harkishun's false certifications to his firms compounded the violation by affirmatively misleading the firms about his compliance with disclosure requirements. This dishonesty prevented the firms from even knowing they needed to seek additional information about undisclosed accounts.

For investors, this case illustrates the comprehensive supervisory framework that governs registered representatives, including monitoring of their personal trading activities. When representatives conceal their outside accounts and make false certifications, it raises questions about what they may be hiding and whether they can be trusted to act honestly with customer accounts.