Avantax Investment Services, Inc has agreed to pay a fine of $200,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

From January 2019 to August 2023, Avantax failed to establish and maintain a supervisory system, and failed to establish, maintain, and enforce written supervisory procedures (WSPs), reasonably designed to achieve compliance with FINRA Rule 2090, which requires member firms to use “reasonable diligence” to determine “the essential facts concerning every customer and concerning the authority of each person acting on behalf of such customer.”

Specifically, with respect to accounts established under the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act (collectively, UTMA Accounts), Avantax failed to establish, maintain, and enforce supervisory systems and WSPs to track or monitor for changes in the authority of custodians of such accounts to effect transactions on behalf of the account beneficiaries.

Based on this conduct, Avantax violated FINRA Rules 3110(a), 3110(b) and 2010.

Avantax has agreed to a censure on top of the fine of $200,000.