First Horizon to pay $325,000 to resolve SEC charges of RBI violations

The Securities and Exchange Commission announced charges against registered broker-dealer First Horizon Advisors, Inc. for failing to maintain and enforce policies and procedures reasonably designed to achieve compliance with Regulation Best Interest. The charges relate to First Horizon’s recommendations of a type of derivative security called a structured note. First Horizon agreed to pay a civil penalty of $325,000 to resolve the SEC’s charges. The SEC’s order finds that First Horizon failed to comply with its Reg BI policies and procedures in multiple ways. “To help reduce the chance of retail customer harm, Reg BI requires broker-dealers to establish, maintain, and enforce written policies and procedures reasonably designed to achieve compliance with Reg BI as a whole,” said Osman Nawaz, Chief of the SEC Enforcement Division’s Complex Financial Instruments Unit. “This action underscores that broker-dealers must ensure appropriate compliance around complex financial products and that it is not enough to simply have written policies; firms must also enforce them.” The SEC’s order finds that First Horizon violated Reg BI’s Compliance Obligation. Without admitting or denying the SEC’s findings, First Horizon agreed to a cease-and-desist order, a censure, and the above-mentioned civil penalty.