← Broker database 2024-12-11
Jack David Faller Suspended for Creating False Branch Inspection Reports
According to FINRA, Jack David Faller was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for nine months for creating false branch inspection reports.
Faller was the designated principal at his former firm responsible for compliance with branch inspection requirements, but he failed to prepare any branch office inspection reports for the firm's sole branch office. When the firm's Chief Compliance Officer asked if he had copies of the branch inspections, Faller admitted he had not completed them but offered to create the reports retroactively.
At the time Faller offered to create the reports, he had not been associated with the firm for over a year. The CCO submitted these fabricated branch inspection reports to FINRA in response to a regulatory request. Neither Faller nor the CCO disclosed to FINRA that the reports were recently created until FINRA discovered they were not contemporaneous records.
By participating in creating these false reports, Faller caused the firm to maintain inaccurate books and records.
Branch inspections are an important supervisory control designed to ensure that branch offices are operating in compliance with firm policies and regulatory requirements. When firms fail to conduct these inspections and then create false records to cover up the failure, it undermines the regulatory framework designed to protect investors.
The suspension is in effect from December 16, 2024, through September 15, 2025.