Reportable Events (FINRA Rule 4530)
Many of the conduct rules covered in this unit generate events that must be reported to FINRA. Rule 4530 specifies exactly what must be reported and when.
The 30-Day Reporting Window
- Member firms must report certain events to FINRA within 30 days of when the firm knows or should have known of the event
- Both the firm and the individual have reporting obligations
- Failure to report is itself a separate violation subject to additional sanctions
Exam Tip: Gotchas
- The reporting window is 30 days, not 10 days or 60 days.
- Charges trigger reporting, not just convictions. An arrest or indictment starts the clock.
- Failure to report is a separate violation with its own penalties.
What Must Be Reported
| Event | Details |
|---|---|
| Felony conviction | Any felony; triggers statutory disqualification |
| Financial-related misdemeanor | Misdemeanors involving theft, fraud, forgery, bribery, securities, banking, or insurance |
| Criminal charges | Indictments, arrests, or charges for any felony or securities-related misdemeanor |
| Customer complaints | Written complaints alleging damages of $5,000 or more |
| Termination for cause | Discharged or permitted to resign due to violations or under investigation |
| Regulatory actions | Actions taken by any regulator (SEC, state, foreign) |
| Tax liens | Federal, state, or local tax liens |
| Bankruptcy | Personal bankruptcy filing (Chapter 7, 11, or 13) |
| Unsatisfied judgments | Civil court judgments that remain unpaid |
Key Points About Reportable Events
- Criminal charges must be reported, not just convictions. An arrest or indictment triggers reporting even before a trial occurs
- Financial events (liens, bankruptcies, judgments) must be reported even though they are not criminal matters
- Quarterly reporting: In addition to the 30-day event reporting, firms must submit quarterly statistical summaries of all written customer complaints
- All reportable events become part of the individual's record on BrokerCheck
Exam Tip: Gotchas
- Liens and bankruptcies must be reported even though they are financial (not criminal) events. A registered person who files for personal bankruptcy must update Form U4 within 30 days. This information becomes publicly available through BrokerCheck.
Dual Reporting Obligations
- Associated person: Must promptly report any reportable event to their member firm
- Member firm: Must report the event to FINRA within 30 days
Think of it this way: The reporting chain works like a relay. The individual hands off the report to the firm, then the firm hands it to FINRA. If either runner drops the baton, both can be penalized.
- If either party fails to report, each faces separate sanctions
- Electronic submissions are made through the FINRA Gateway
Exam Tip: Gotchas
- Both the individual and the firm have separate reporting duties. If either fails to report, each faces independent sanctions.
- Customer complaints at the $5,000 threshold must be reported regardless of merit.