Vanguard Marketing Corporation (VMC) has agreed to pay a $950,000 fine and accept a censure to settle findings by the Financial Industry Regulatory Authority (FINRA) that it gave customers inaccurate cost-basis information over roughly a decade.
According to FINRA, a series of technical issues caused VMC to communicate inaccurate information to customers about the cost basis of their investments from approximately 2012 to 2023. The inaccurate figures appeared in account statements, trade confirmations and in Forms 1099, in violation of FINRA Rules 2210, 4511 and 2010.
FINRA separately found that the firm failed to reasonably investigate red flags relating to the inaccurate information on those documents, in violation of FINRA Rules 3110 and 2010.
Cost basis is central to both investment decisions and tax reporting. FINRA noted that investors rely on the accuracy of account statements and trade confirmations when making financial decisions, and on the accuracy of Forms 1099 when calculating taxes owed.
About Vanguard Marketing Corporation
VMC has been a FINRA member since 1977 and has its principal place of business in Malvern, Pennsylvania. The firm has approximately 9,600 registered representatives operating out of roughly 175 registered branch locations.
