Fidelity, through an affiliate, provides recordkeeping services to companies (plan sponsors) for their equity compensation plans through stock plan services (SPS) accounts for the companies’ domestic and international employees (plan participants). From December 2012 to October 2020, the firm’s supervisory system, including its written supervisory procedures, was not reasonably designed to supervise associated persons’ access to SPS account data or the transmittal of funds from international SPS accounts.

Between October 2019 and April 2023, while associated with IRC, Barron participated in private securities transactions by soliciting 14 investors to enter into 30 promissory note transactions, totaling $979,500, with a limited liability company (LLC) owned and controlled by Barron. The notes were securities, and Barron failed to provide the firm with adequate prior written notice of these private securities transactions.

From June 30, 2020, to September 11, 2024, Investments for You failed to establish and maintain written policies and procedures, and a supervisory system, reasonably designed to achieve compliance with Securities Exchange Act of 1934 Rule 15/-1 (Regulation Best Interest or Reg BI).

In January 2021, a registered representative associated with IRC disclosed to IRC in writing that he had begun issuing promissory notes on behalf of a disclosed outside business activity (OBA). IRC failed to evaluate whether this activity was properly characterized as an OBA or whether it should instead be treated as an outside securities activity subject to the requirements of FINRA Rule 3280. As a result, IRC violated FINRA Rules 3270.01 and 2010.