A $10,000 fine and suspension were imposed by FINRA three months after the agency discovered a Texas broker working as a real estate tycoon.
The broker operated a real estate company that bought, sold, and leased houses, but they neglected to inform their firm. That is an issue in accordance with FINRA Rule 3270. Brokers must obtain written consent before engaging in any outside business. "Weekend house flipper" is not tolerated. Now that's not say say that the broker had any bad dealings in his real estate business or it was not successful.
These side projects may lead to conflicts of interest and off-book client solicitation, according to FINRA. OBA enforcement will continue to be a primary priority for the agency in 2025.
Businesses are being instructed to strengthen OBA attestations and background checks. Brokers, be aware that the most costly sentence in compliance is still "I did not think it counted."
