Statutory disqualification of broker for failure to disclose tax liens upheld by Second Circuit.

The petitioner sought review of an order of the Securities & Exchange Commission (SEC) affirming the sanctions imposed by FINRA which subjected the petitioner to statutory disqualification for failing to disclose that certain tax liens had been filed against by the IRS. The 2^nd Circuit found substantial evidence to support the commission’s factual findings that the petitioner intentionally failed to disclose the liens on registration forms he was required to file with FINRA and that the information regarding the liens was material. The court also held that the SEC did not abuse its discretion in concluding that the petitioner’s conduct constituted a willful violation of the Securities Exchange Act.

Case Law Alert - 3rd Qtr 2012