Parsonex Capital Markets Fined for Form CRS Disclosure Violations

According to FINRA, Parsonex Capital Markets, LLC was fined $10,000 for willfully violating Form CRS disclosure requirements by omitting required information from its customer relationship summary.

The firm failed to disclose on its Form CRS that a number of its financial professionals had legal or disciplinary history, which is critical information investors need to make informed decisions about who manages their money. The firm also failed to disclose that its control affiliate had been the subject of a disciplinary action with the SEC, even though the firm had updated its Form BD to reflect this action. Additionally, the firm omitted other required information including specific headings and disclosures about potential conflicts of interest.

Form CRS is a brief relationship summary designed to help retail investors understand the services their financial professional provides, the fees they will pay, conflicts of interest, and whether the professional or firm has a disciplinary history. By filing and delivering a Form CRS that omitted required information and then failing to update it, the firm willfully violated securities laws.

This case demonstrates the importance of complete and accurate disclosures to investors. Form CRS was created specifically to help investors make informed choices by providing key information in a standardized, easy-to-understand format. When firms omit disciplinary history or other material information from these disclosures, they deprive investors of critical facts needed to assess whether to do business with that firm or financial professional. Investors should always review Form CRS documents carefully and ask questions about anything that seems incomplete.

Source: FINRA disciplinary actions (PDF)