According to FINRA, Shane Edward Perry was fined $7,500 and suspended for five months on January 19, 2022, for willfully failing to timely amend his Form U4 to disclose outstanding federal tax liens totaling $1,015,063.

The Internal Revenue Service filed tax liens against Perry and sent notifications to his residence, so he was aware of the liens and his obligation to disclose them on his Form U4. However, Perry only disclosed the liens after they were brought to his attention by his member firm or FINRA, approximately eight to 30 months after they were required to be reported.

Form U4 is the Uniform Application for Securities Industry Registration that registered representatives must keep current and accurate. It includes questions about financial matters, including tax liens, bankruptcies, judgments, and other financial issues that could affect a representative's fitness to work in the securities industry.

The requirement to disclose tax liens and other financial problems exists because financial difficulties can create temptations for registered representatives to engage in misconduct to resolve their financial issues. Firms and investors need to know about representatives' financial problems to assess potential risks.

Perry's tax liens totaling over $1 million represented substantial financial obligations that could have impacted his financial decision-making and created pressure that might affect his conduct in dealing with customers. The willful failure to disclose these liens for extended periods deprived his firm and potential customers of important information about his financial condition.

The delays in disclosure - ranging from eight to 30 months - were substantial and went well beyond minor or inadvertent omissions. Perry only disclosed the liens when prompted by his firm or FINRA, rather than proactively updating his Form U4 as required.

For investors, this case illustrates the importance of reviewing your financial advisor's Form U4 disclosure through FINRA BrokerCheck. BrokerCheck displays information about tax liens, bankruptcies, customer complaints, and regulatory actions. While financial difficulties do not automatically disqualify someone from working in the securities industry, investors have a right to know about these issues when deciding whether to work with a particular advisor.