CTFCC, a registered intermediary program created by the Financial Institutions Supervisory Agency (FINRA), has agreed to pay a total of $1,917,821 in fines and penalties to settle a federal lawsuit alleging the agency sold access to its clients to third parties.
The settlement came as a result of a class action lawsuit filed by former CTFACS whistleblower Thomas Hays in 2015.
Hays alleged CTFGC and FINRA employees sold access through FINRA’s Financial Institance Services Agency (FISA) and the Securities and Exchange Commission’s Investor Advisory Services Division (IAS) to third-party firms that had no direct connection to the FINRA.CTFCC agreed to the settlement and pay $9,094,500 in civil penalties to Hays and another plaintiff, the Financial Industry Regulatory Authority, or FINRA, in January 2017.
FINRA declined to comment on the settlement.FISA’s Regulation Advisers and Advisory Committees (RAIC) are the regulatory agencies that oversee FINRA and the FSA.
FINNAFRA is the regulator of the CTFCA program.
The FSA is the regulatory agency for the CTCA program.FTC rules require the CSCA program to provide certain information to financial institutions to ensure that their disclosures are accurate, accurate and complete.
The disclosures must include the name, address, contact information, contact type and other information required by the CTSA program rules.
In addition, the disclosures must provide the financial institution with the name and contact information of a person who has a direct connection with the institution.
The disclosures must also disclose, among other things, the name of the person whose information the institution obtained, the type of information obtained, and whether the information was obtained by a financial institution or an intermediary.
The disclosure requirements for the SEC’s Investor Services Division and the ISA were amended in January 2018.
In both cases, the agency requires the disclosures to provide a more detailed explanation of the types of information the information sought was used for.
The CTFCCC program and the FINCA program must also provide a copy of any notices of proposed rulemaking that are received from financial institutions that provide a connection with financial institutions.
The FSA, which regulates financial intermediation, is also responsible for oversight of the program.
FINSA said in January that the program “does not permit the sale of information to third party entities that do not have a direct relationship with the issuer of the securities.”
The FINRA program and its associated financial advisory committee are responsible for ensuring that the information obtained from financial intermediators is accurate, complete and timely.
The program requires that financial institutions provide the disclosures required by FINRA rules and regulations, which require financial intermediary firms to provide an initial copy of the material that was obtained through the FINNAC program.
The FINARA rulemaking process for financial intermediations was amended in May 2018.
The rulemaking requires financial intermediated firms to file an application with FINRA in order to be eligible for a FINRA waiver, a process that can take up to five business days.
If FINRA determines that the application is timely and complete, FINRA will review the application.
FINARA has not received a final application for the program, but FINRA has made a series of recent public announcements on the issue.