← Broker database 2024-07-19
The Jeffrey Matthews Financial Group Fined for Regulation Best Interest Violations
According to FINRA, The Jeffrey Matthews Financial Group, L.L.C. was censured and fined $35,000 on July 19, 2024, for failing to establish, maintain, and enforce written policies and procedures reasonably designed to achieve compliance with Regulation Best Interest.
Despite the firm's awareness of Reg BI's implementation date, its written supervisory procedures contained a section titled "Reg BI" that contained no actual policies or procedures regarding complying with its requirements. Furthermore, the firm's training on Reg BI to its representatives was inadequate as it focused on suitability rather than the requirements of Reg BI. As a result, the firm willfully violated Exchange Act Rule 15l-1(a)(1) and MSRB Rule G-27.
The firm also failed to establish and maintain written supervisory procedures reasonably designed to achieve compliance with its Exchange Act Rule 17a-14 obligations to prepare, file, deliver, and update its Form CRS. While the firm's procedures acknowledged that it was required to deliver Form CRS to all retail customers and detailed a few general procedures, it did not prescribe any specific procedures for preparing, filing, or updating Form CRS.
After FINRA identified these issues, the firm revised its written supervisory procedures to provide guidance regarding Reg BI and Form CRS, and implemented proper training on Reg BI for its representatives. This case demonstrates the importance of firms implementing comprehensive policies and procedures to comply with Regulation Best Interest, which requires broker-dealers to act in the best interest of retail customers when making recommendations. Investors can request a copy of their firm's Form CRS, which provides important information about the services and fees offered by the firm.