SEC Hits First Horizon With $325,000 Reg BI Fine

“Because of incompatibilities in the two systems First Horizon did not have accurate customer information necessary to review structured note recommendations for compliance with First Horizon’s Reg BI policies and procedures,” the SEC said.

Also, the registered representatives who joined First Horizon from IberiaBank “did not have access to First Horizon’s exception reporting site to review structured notes transactions flagged as non-compliant, as required by First Horizon’s Reg BI policies and procedures,” the order states.

Further, in 2023, the firm approved structured note recommendations without all the documentation required by its Reg BI policies and procedures.

“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, in a statement.

“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.”

Without admitting or denying the SEC’s findings, First Horizon agreed to a cease-and-desist order, a censure and the civil penalty.