October 28, 2011 - US watchdog Finra has been given a taste of its own medicine, scolded by the Securities and Exchange Commission (SEC) for allegedly doctoring documents before passing them on. According to the SEC, in August 2008 the director of Finra's Kansas City district office "caused the alteration of three records of staff meeting minutes just hours before producing them to the SEC inspection staff, making the documents inaccurate and incomplete".

At the time of the alleged incident, Finra's boss was Mary Schapiro, now the SEC's chairman.

This was the third time the SEC had been handed doctored documents in eight years by Finra, which is the US brokerage industry's self-regulatory body.

Without admitting or denying the findings, Finra has consented to the SEC's order to bring in an independent consultant to carry out a one-time comprehensive review of policies and procedures and training on "document integrity".

Gerald Hodgkins, associate director, division of enforcement, SEC, says: "The law requires Finra to produce the documents the SEC seeks in its examinations in complete and accurate form. Although Finra has previously taken steps to improve compliance, those enhancements did not go far enough to prevent the document production failure that occurred in its Kansas City District Office."

Richard Ketchum, chairman and CEO, Finra, says: "I am personally committed to taking all possible steps to ensure that this type of conduct does not reoccur. We have taken prompt action to report, investigate and discipline the behavior at issue in this matter. Under no circumstances will such conduct be tolerated at Finra."