According to FINRA, David Kitchen Franklin was barred from association with any FINRA member in all capacities for refusing to provide documents and information requested by FINRA.
FINRA's investigation was initiated based on allegations in a tip submitted to FINRA and the circumstances giving rise to a Form U5 filed by Franklin's member firm. The Form U5 stated that the firm had terminated Franklin's registrations because he was under criminal indictment.
Being under criminal indictment is itself grounds for termination by a broker-dealer, as firms have an obligation to ensure their registered representatives meet standards of character and fitness. The specific nature of the criminal charges was not disclosed in the FINRA action.
Franklin's refusal to provide requested documents and information to FINRA resulted in his permanent bar from the industry. This automatic sanction reflects the fundamental importance of cooperation with regulatory investigations.
FINRA depends on the cooperation of registered persons to investigate potential misconduct and protect investors. When individuals refuse to cooperate, FINRA cannot determine whether violations occurred or take appropriate action to protect the investing public. The bar sanction ensures that non-cooperative individuals cannot continue working with investors.
For investors, this case underscores the importance of researching your financial professionals. FINRA's BrokerCheck system provides information about registered representatives, including employment history, qualifications, and any regulatory actions or customer complaints. Checking this resource before working with a broker can help you make informed decisions.
If you worked with Franklin and have concerns about your accounts or transactions, you should review your account statements carefully and consider consulting with a securities attorney or filing a complaint with FINRA.