TRANSACTION-BASED COMPENSATION REQUIRES REGISTRATION . . . PERIOD
FINRA’s National Adjudicatory Counsel (“NAC”), recently, affirmed a disciplinary panel decision significantly sanctioning a broker-dealer for paying unregistered persons and entities. See https://www.finra.org/sites/default/files/2020-07/NAC_2014042606902_Silver-Leaf_062920.pdf.
FINRA alleged, among other things, that a broker-dealer paid transaction-based compensation to “unregistered finders,” and non-registered entities owned by its registered persons. Ultimately, the NAC agreed that, over a 3 year period, the broker-dealer paid and/or shared certain transaction-based compensation with unregistered finders and entities affiliated with registered persons, rather than…