Is consulting on a 401(k) plan considered a violation of FINRA’s rules prohibiting outside business activities? A broker recently settled with FINRA on this issue without admitting or denying the findings in a Letter of Acceptance, Waiver and Consent (AWC).
The broker provided consulting services without giving his broker dealer prior written notice of the contemplated activities or nature of his compensation, earning at least $11,889 for meetings, travel, phone calls, document review and asset allocations. The AWC asserted that the broker engaged in undisclosed outside business activities in violation of FINRA Rules 3270.
A word to the wise: Get permission first.
