Corporate Negligence Case Study: United First Partners & Its Impact on Market Integrity
TL;DR: From 2019 to 2022, financial firm United First Partners (UFP) operated with a stunning disregard for fundamental market rules. The firm allowed its research analysts and sales staff to mingle freely, sharing non-public reports before they were released to clients, creating a ripe environment for conflicts of interest. At the same time, the firm’s Chief Compliance Officer, Elizabeth Dickerson, failed to review the outside trading accounts of her own employees for over a year—including during the volatile period of the COVID-19 pandemic—and the firm failed to report hundreds of securities transactions to regulators, effectively hiding them from public view.
Continue reading to understand the full scope of the violations and their systemic implications.
Inside the Allegations: A Pattern of Willful Neglect
At the heart of the case against United First Partners and its Chief Compliance Officer, Elizabeth Dickerson, is a multi-year breakdown of basic supervisory duties.
The firm’s business, which involved providing research and brokerage services to institutional customers, was systematically undermined by its own internal failures.
The most damning failure involved the complete absence of an “information barrier” between the firm’s research analysts and its sales and trading staff. United First Partners’ written rules contained no provisions to restrict the flow of information, and in practice, analysts and traders were allowed to interact without restriction.
Drafts of research reports—containing market-moving analysis and recommendations—were regularly circulated to the sales and trading department for their input before being published to clients.
This practice effectively turns the concept of independent research on its head. Instead of providing objective analysis, the research department’s work was subject to the influence of those whose compensation is tied to trading volume and revenue. Elizabeth Dickerson, who was not only the Chief Compliance Officer but also the firm’s Research Principal, was copied on these emails but did nothing to stop the practice.
She was also aware that the content of these sensitive reports was discussed at meetings between the two departments, yet she failed to monitor or limit the information being shared.
Simultaneously, Dickerson abdicated her responsibility to supervise the outside brokerage accounts of the firm’s own employees. For approximately forty employee accounts, she was tasked with reviewing monthly statements to detect potential misconduct like insider trading. Her process was to manually review only three or four statements per month, with no system for tracking which accounts were reviewed or documenting her findings.
This flimsy process collapsed entirely between March 2020 and March 2021. During the COVID-19 pandemic, Dickerson worked from home and was aware that the paper statements were being sent to the empty office. She made no effort to have them rerouted or sent to her electronically, and for an entire year, conducted no review whatsoever.
This negligence meant the firm failed to detect that three of its own employees were trading in securities covered by UFP’s own research group, a glaring red flag for potential conflicts of interest or misuse of non-public information.
The firm’s operational failures extended to its core reporting duties. For two full years, from April 2019 to April 2021, UFP executed at least 223 transactions in fixed-income securities but failed to report a single one to the Trade Reporting and Compliance Engine (TRACE). This system is essential for price transparency in the bond market. By failing to report, UFP rendered these trades invisible to the broader market, undermining the integrity of the public audit trail!
The same pattern emerged in its municipal securities business. For five years, from July 2019 to June 2024, UFP failed to report any of its municipal bond transactions to the Real-time Transaction Reporting System (RTRS). In both cases, the firm’s written supervisory procedures did not even address its reporting obligations until regulators began their investigation.
Finally, the firm sent out inaccurate and incomplete confirmations for customer options trades. An internal sample revealed that 44% of confirmations were missing basic required information, such as whether UFP was acting as a principal or agent in the trade.
Once again, United First Partners’ supervisory system was a failure; its own rules required a review of these confirmations but failed to specify who was responsible, how the review should be done, or what to do when errors were found.
Timeline of Systemic Failures
| Period | Corporate Misconduct |
| April 2019 – June 2022 | UFP and Dickerson failed to supervise outside brokerage accounts of employees, allowing potential conflicts of interest to go undetected. |
| April 2019 – June 2022 | Failed to establish information barriers, allowing research analysts to share pre-publication reports with sales and trading staff. |
| April 2019 – April 2021 | Failed to report any of its 223 eligible fixed-income transactions to the TRACE system, harming market transparency. |
| April 2019 – April 2020 | Provided customers with inaccurate or incomplete confirmations for 130 options transactions. |
| July 2019 – June 2024 | Failed to report any of its customer municipal securities transactions to the RTRS system, a five-year reporting failure. |
| March 2020 – March 2021 | Dickerson failed to review any outside brokerage account statements for an entire year during the COVID-19 pandemic. |
Legal Minimalism: The Illusion of Compliance
The case of United First Partners is a textbook example of legal minimalism, a common strategy in the landscape of neoliberal capitalism. The firm had written supervisory procedures (WSPs), but they were hollow shells. These documents existed on paper to create the appearance of compliance, but they lacked the necessary detail and enforcement mechanisms to be effective.
For instance, the rules required reviewing employee account statements but failed to outline how to do it, how often, or how to document it.
This ambiguity is not an accident; it is a feature.
It allows a firm to claim it has a policy in place while doing nothing to actually follow it, treating compliance not as a moral or legal duty, but as a branding exercise to placate regulators. This is the system working as intended, rewarding those who master the form of the law while ignoring its substance.
Profit-Maximization at All Costs: Gutting Ethical Firewalls
Why would a firm permit its research analysts to collaborate with its sales desk on reports? The answer lies in the relentless pressure for profit-maximization that defines modern capitalism. Independent research is a cost center. Its value is in providing unbiased information to clients, which builds long-term trust but may not drive short-term revenue.
By contrast, the sales and trading desk is a profit center. Allowing traders to influence a research report’s recommendations creates an opportunity to align the “independent” analysis with the firm’s existing trading positions or sales strategies. It transforms research from an ethical obligation into a tool for marketing and profit generation.
The systemic failure at UFP to erect information barriers reveals a corporate culture where the potential for immediate financial gain was prioritized over the fundamental duty to manage conflicts of interest and protect clients.
Corporate Accountability Fails the Public
In response to these multi-year, systemic failures, the regulatory sanctions seem jarringly light. UFP was censured and fined $215,000. Elizabeth Dickerson was fined just $5,000 and suspended from acting in a principal capacity for one month. The settlement, crucially, allows both the firm and Dickerson to consent to these penalties without admitting or denying the findings.
This outcome is a feature, not a bug, of a regulatory system that often prioritizes settlements over public trials. A $215,000 fine for a firm engaged in widespread misconduct over several years can be viewed as a mere cost of doing business, easily absorbed and written off.
The lack of an admission of guilt allows the firm to avoid full public accountability and shields it from follow-on civil litigation. Dickerson’s one-month suspension from a principal role does not prevent her from remaining associated with a member firm in other capacities.
This resolution does little to deter future misconduct. It sends a message to the industry that even profound supervisory failures will be met with manageable fines and minimal disruption, reinforcing a cynical calculus where the rewards of non-compliance outweigh the risks.
This Is the System Working as Intended
It is tempting to view the UFP case as an aberration, the story of one poorly managed firm. But to do so would be to miss the point. This case is a perfect illustration of how the financial system under neoliberal capitalism is designed to function. It is a system that rewards the pursuit of profit through complexity and opacity.
The failure to report hundreds of trades to public systems like TRACE and RTRS is no clerical error or anything of the sort; it is an act that erodes the public good of a transparent market. This illegal & unethical commingling is the logical outcome of a system that incentivizes firms to leverage every asset, including their “independent” research, for financial gain!
The settlement is not a failure of justice; it is the system’s preferred outcome. It resolves the matter efficiently, collects a fee, and allows the machinery of the market to continue with minimal interruption. The case of United First Partners is not a story of a system that broke down.
It is the story of a system that worked exactly as it was designed to.
Frivolous or Serious Lawsuit?
The action brought by the Financial Industry Regulatory Authority was unequivocally serious and legitimate. The evidence presented in the Letter of Acceptance, Waiver, and Consent details clear, extensive, and multi-year violations of foundational securities laws and regulations.
These rules—requiring supervision, transparency, and the management of conflicts of interest—are not technicalities. They are the bedrock of investor protection and fair markets.
The corporate misconduct at United First Partners was not a borderline case or a matter of interpretation. It was a documented, systemic breakdown of compliance that left the firm, its clients, and the market exposed to significant risks. The regulatory action, while arguably lenient in its penalties, was a necessary response to a profound and well-documented failure of corporate responsibility.
Please click on this link to read more about this scandal on the FINRA website: https://www.finra.org/sites/default/files/fda_documents/2020065261801%20United%20First%20Partners%2C%20LLC%20CRD%20155456%20and%20Elizabeth%20Dickerson%20CRD%201917497%20AWC%20lp%20%282025-1745454004091%29.pdf
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