According to FINRA, Jorey T. Bernstein was barred from association with any FINRA member firm in all capacities for refusing to provide documents and information requested by FINRA in connection with its investigation into allegations made in a Form U5 filed by his member firm.
The Form U5 disclosed that Bernstein's association with the firm had been voluntarily terminated after he declined to provide the firm with unredacted personal bank statements to identify payees of withdrawals from his bank accounts. This suggests the firm had concerns about Bernstein's financial activities that warranted further investigation.
When FINRA sought to investigate the circumstances underlying Bernstein's termination, he refused to provide the requested documents and information.
Form U5 is the uniform termination notice that firms must file when a registered person leaves the firm. Firms are required to disclose the circumstances of the termination, including any internal investigations or concerns about the individual's conduct. These disclosures help protect investors by alerting future employers and regulators to potential issues.
When a firm requests bank statements from an associated person, it is typically investigating potential conversion of customer funds, undisclosed outside business activities, or other financial irregularities. Bernstein's refusal to provide this information to his firm, followed by his refusal to cooperate with FINRA's investigation, prevented a full understanding of what occurred.
FINRA's ability to investigate potential misconduct depends on the cooperation of associated persons. When individuals refuse to cooperate, FINRA imposes bars to protect investors from individuals who may have engaged in misconduct that cannot be fully investigated.
Investors benefit from this enforcement approach because it ensures that individuals who refuse to account for their conduct cannot continue working in the securities industry.