← Broker database 2022-11-28
Cathie Joughin Barred for Refusing to Provide Information About Fiduciary Relationship Violations
According to FINRA, Cathie Ann Joughin was barred from association with any FINRA member in all capacities for refusing to provide information and documents requested during a FINRA investigation.
The investigation concerned a Form U5 filed by Joughin's member firm stating that she had resigned while under review for compliance policy violations related to a fiduciary relationship. Fiduciary relationships impose the highest duty of loyalty and care. When securities professionals serve as fiduciaries for customers, they must act in the customer's best interest and avoid conflicts of interest.
Compliance policy violations related to a fiduciary relationship could involve self-dealing, conflicts of interest, misuse of customer assets, or failure to properly disclose the fiduciary relationship to the firm. Such violations are serious because they involve breach of trust and potentially misuse of a position of confidence.
FINRA's investigation sought to understand the nature of the fiduciary relationship, what compliance policy violations occurred, whether customers were harmed, and what corrective action was needed. Joughin's refusal to provide requested information and documents prevented FINRA from fully investigating these serious matters.
All registered persons must cooperate with regulatory investigations. Those who resign while under review and then refuse to provide information about the matters under investigation demonstrate they will not be held accountable and are unfit for the industry.
The permanent bar protects investors from an individual who allegedly violated policies related to a fiduciary relationship and then refused to explain her conduct to regulators. This case reinforces that cooperation with investigations is mandatory and refusal results in permanent removal from the industry.