Regulatory FrameworkQuestion 383 of 398
A member firm receives a written customer complaint alleging misconduct by a registered representative involving the customer's funds. What is the firm's general obligation regarding this complaint?
a.Discard it if the representative denies wrongdoing
b.Keep a record of the complaint and report it as required, including on the representative's Form U4 if applicable
c.Forward it directly to the SEC for prosecution
d.Refer it immediately to FINRA arbitration
Explanation
Firms must keep records of written customer complaints and, depending on the nature and allegations, report them to FINRA and update the representative's Form U4 disclosures where required. Certain complaints involving allegations of theft, forgery, or misappropriation are individually reportable. Proper recordkeeping and reporting help regulators monitor conduct.
Law Reference: FINRA RulesPractice all 398 questions free — no signup required.
Related questions on this topic
- Which of the following best describes the jurisdiction of the Chicago Board Options Exchange (CBOE) as a self-regulatory organization?
- An individual passed the SIE exam but has not yet been hired by a member firm. How long do SIE exam results generally remain valid?
- A candidate wants to sell mutual funds and variable annuities but not general equities or options. In addition to the SIE, which qualification exam is the appropriate 'top-off' for this limited scope?
- Which statement about the relationship between FINRA and the SEC is most accurate?
- Under general recordkeeping rules of the Securities Exchange Act of 1934, certain fundamental broker-dealer records, such as blotters and ledgers, must generally be retained for a minimum of:
- A newly hired individual will supervise the firm's general securities sales activities and approve new accounts. To act as a supervisor, this person must typically qualify as a:
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against FINRA Securities Industry Essentials (SIE) Exam · How we review