The Securities and Exchange Commission on Thursday ordered the Financial Industry Regulatory Authority (Finra) to hire an independent consultant and implement remedial measures for producing documents for SEC inspections following a recent incident where Finra documents were altered hours before they were inspected by the SEC.

According to the SEC, certain documents requested by the SEC's Chicago regional office during an inspection were altered just hours before Finra's Kansas City District Office provided them.

Gerald Hodgkins, Associate Director of the SEC's Division of Enforcement, said SEC law requires Finra to produce documents requested by the SEC in a "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 Hodgkins said. "This order will help ensure that Finra effectively addresses the weaknesses in its training as well as its policies and procedures.''

The SEC's order finds that on Aug. 7, 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.

According to the SEC's order, the production of the altered documents by the Kansas City district office was the third instance during an eight-year period in which an employee of Finra or its predecessor (National Association of Securities Dealers) provided altered or misleading documents to the SEC.

Without admitting or denying the findings, Finra's consented to the SEC's order requiring it to cease and desist from committing or causing future violations. The SEC says it considered remedial acts promptly undertaken by Finra and cooperation with SEC staff in deciding to accept Finra's settlement offer.

Finra has consented to engage an independent consultant within 30 days that will:

* Conduct a one-time comprehensive review of Finra's policies and procedures and training relating to document integrity.

* Assess whether the policies and procedures and training are reasonably designed and implemented to ensure the integrity of documents provided to the SEC.

* Make recommendations for the enhancement of Finra's policies and procedures and training as may be necessary in light of the consultant's review and assessment.