A Rye financial services firm has been censured and fined for not disclosing its disciplinary history to clients.
G.research president Vincent Amabile consented to the censure and a $30,000 fine that were issued on Nov. 11 by The Financial Industry Regulatory Authority. He agreed to implement new supervisory procedures within 60 days.
G.research is an institutional research and brokerage firm that is affiliated with Gabelli financial services, a Rye-based syndicate that manages about $32 billion in assets.
In June 2020, new SEC rules required every broker-dealer to publish a Customer Relationship Summary that explains the types of services offered, the costs, conflicts of interest, and the firm’s legal and disciplinary history.
One section of the report poses a question: Do you or your financial professionals have legal or disciplinary history? If the answer is “Yes,” the firm must direct clients to a website where they can research the firm and its employees.
G.research and four affiliates responded “No” to the disciplinary history question in 2020 and 2021 and then “Yes” in 2023.
The consent agreement does not provide details about the omitted disciplinary history. According to FINRA’s BrokerCheck tool, G.research was subject to several regulatory events over the past 30 years. In 2013, for instance, FINRA issued a $1 million fine for insufficient disclosure of risks, conflicts of interests, and misleading statements in marketing materials for private partnerships.
In the new case, FINRA found that G.research failed to establish and maintain written procedures to comply with FINRA and U.S Securities and Exchange Commission rules.
The firm’s conduct violated a SEC rule that requires broker-dealers to disseminate reports “for the protection of investors” and a FINRA rule requiring firms to “observe high standards of commercial honor and just and equitable principles of trade.”
