According to FINRA, Thomas John Tedeschi was assessed a deferred fine of $5,000 and suspended for three months in all capacities for failing to amend his Form U4 to disclose felony charges.

Tedeschi was arrested and charged in Nassau County, New York with Criminal Sale of a Controlled Substance in the Third Degree and Criminal Possession of a Controlled Substance in the Third Degree, both Class B felonies. While Tedeschi ultimately pled guilty to a reduced misdemeanor charge of criminal possession of a controlled substance, he was aware he had been initially charged with two felonies and discussed the charges with supervisors at his member firm.

Despite this knowledge and despite discussing the charges with firm supervisors, Tedeschi did not timely amend his Form U4 to disclose the felony charges as required. In fact, Tedeschi never disclosed the felony charges on his Form U4 prior to his resignation from the firm.

Form U4 is the Uniform Application for Securities Industry Registration and requires registered persons to disclose certain criminal charges, including felony charges, typically within 30 days. These disclosure requirements exist to ensure transparency about the backgrounds of registered persons and to provide regulators and firms with information needed to assess whether individuals pose risks to investors.

The failure to disclose criminal charges is a serious violation because it deprives regulators, firms, and the public of material information about a registered person's background. Even though the charges were ultimately resolved with a misdemeanor plea, the initial felony charges were required to be disclosed when they occurred.

This case demonstrates the importance of complete and timely disclosure on Form U4. Investors rely on BrokerCheck, which draws information from Form U4, to research the backgrounds of financial professionals. Registered representatives have an obligation to keep their Form U4 information current and accurate, and failures to disclose criminal charges undermine investor protection and transparency in the industry.