← Broker database 2025-04-24
Regulus Financial Group Fined for Incomplete Form CRS Disclosures
According to FINRA, Regulus Financial Group, LLC was censured and fined $20,000 for willfully failing to disclose required disciplinary history information in its customer relationship summary (Form CRS).
The Kentwood, Michigan firm was found to have omitted its own and its control affiliate's disciplinary history from the Form CRS it filed and delivered to customers. Form CRS is a document designed to help retail investors understand the nature of their relationship with a broker-dealer or investment adviser.
After the firm filed its initial Form CRS and an amended version, FINRA cautioned it that the responses regarding legal or disciplinary history were incomplete or misleading. Despite this warning, the firm filed two additional amended Forms CRS that still failed to properly disclose its disciplinary history.
Instead of responding "Yes" to the question about legal or disciplinary history, the firm erroneously stated on both forms: "Yes, although the firm does not, some of our financial professionals do have a legal or disciplinary history." This statement was misleading because the firm itself had reportable history.
Subsequently, a firm control affiliate agreed to sanctions creating additional disclosable history. The firm also had other legal or disciplinary matters requiring disclosure on its Form BD. However, the firm failed to file an amended Form CRS reflecting this history until later prompted.
Form CRS is an important investor protection tool. The legal and disciplinary history question helps investors understand whether there have been past problems that might be relevant to their decision to do business with a firm. When firms fail to accurately disclose this information, investors cannot make fully informed choices.
Investors can access Form CRS and disciplinary history for any broker-dealer through FINRA BrokerCheck at brokercheck.finra.org.