Statutory Disqualification/ FORM U4 question

Have a few questions.

Firstly do you only report a felony or securities related misdemeanor if you were convicted or if you were simply accused ?

And also I’m Kaplan I believe it said securities misdemeanor within the last 5 years, but achievable says 10 years

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Hey there! Let’s start first with the criminal items requiring disclosure on Form U4. Here’s language directly from the form itself:

14A. (1) Have you ever:
(a) been convicted of or pled guilty or nolo contendere (“no contest”) in a domestic, foreign, or military
court to any felony?
(b) been charged with any felony?

14B. (1) Have you ever:
(a) been convicted of or pled guilty or nolo contendere (“no contest”) in a domestic, foreign or military
court to a misdemeanor involving: investments or an investment-related business or any fraud, false
statements or omissions, wrongful taking of property, bribery, perjury, forgery, counterfeiting,
extortion, or a conspiracy to commit any of these offenses?
(b) been charged with a misdemeanor specified in 14B(1)(a)?

FINRA requires disclosure of any conviction, guilty plea, no contest plea, or charge related to any felony or a securities-related misdemeanor. Being accused of a crime doesn’t require disclosure unless you meant being charged. There’s no time frame on disclosure of these criminal details. Even if a person was charged with a felony 40 years ago, it must be disclosed on Form U4.

For the second part of your question - I believe you’re referencing statutory disqualification. This relates to the criminal actions that prevent a person from working in the industry. If a person has any felony or securities-related misdemeanor conviction (includes guilty and no contest pleas as well) in the last 10 years, they are generally disqualified from gaining effective registration, effectively banning them from the securities industry.

Here’s the direct language from FINRA on the topic:

The list of disqualifying events according to Section 3(a)(39) of the Exchange Act are as follows:

  • Certain misdemeanor and all felony criminal convictions for a period of ten years from the date of conviction.

If Kaplan’s material says the time period for criminal-related statutory disqualifications is 5 years, they are wrong. Maybe double check their material and make sure they weren’t referencing something else?


Appreciate this answer. Very helpful. I’ll def recheck I could be wrong!

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Okay so no matter when it was, it does need to be disclosed

But it only subject to disqualification if it’s within 10 years. Is that right

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Yep - you’re absolutely right!

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