Prospecting potential investors on the National Do Not Call Registry can be pricey.

Finra has slapped Dawson James Inc. of Boca Raton, Fla., with a $20,000 fine and a censure—the only mark in the broker-dealer’s otherwise 15-year history—for prospecting would-be investors who had registered their phone numbers on the Federal Trade Commission’s registry.

The firm, which has 43 registered representatives and is focused primarily on selling private and public securities, settled the charges with Finra without admitting or denying the findings on July 29, according to Finra.

Dawson James required that its registered representatives use the Gryphon Network, which automatically blocked calls to telephone numbers that appeared on the National Do Not Call (DNC) list and the firm's don't-call list, Finra said.

Nevertheless, reps in Dawson James' New York branch office bypassed the firm’s network and safeguards when they called at least 49 telephone numbers that appeared on the national DNC list, Finra said.

The regulator charged Dawson James with violating a Finra rule that prohibits, among other things, member firms and their registered reps from initiating outbound calls to any person who has registered his or her telephone number on the DNC registry.

The only exceptions to Finra's rule are in the following circumstances:

• A firm or rep has an established business relationship with the recipient of the call. “A person's request to be placed on the firm-specific do-not-call list terminates the established business relationship exception to that national do-not-call list provision for that member even if the person continues to do business with the member,” according to Finra.

• A client has given a firm or rep “prior express invitation or permission. Such permission must be evidenced by a signed, written agreement (which may be obtained electronically under the E-Sign Act) between the person and member which states that the person agrees to be contacted by the member and includes the telephone number to which the calls may be placed.”

• A rep making calls has a personal relationship with the recipient of the call.

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