On July 3, 2003, the Attorney General of New Jersey and the New Jersey Bureau of Securities filed a civil complaint in the Superior Court of New Jersey against Toth and others, alleging, among other things, fraud in connection with the offer, sale or purchase of securities in 2001. The July 2003 New Jersey complaint alleged that Toth and others made materially false and misleading statements and omissions regarding the degree of risk associated with the investment, the intended investment aims of the defendants, and the suitability of the investment for 18 investors. In July 2005, the New Jersey Superior Court dismissed the July 2003 New Jersey complaint without prejudice.

The core fact here does not seem to be in dispute -- namley, that Toth's Form U4 in question failed to disclose the New Jersey civil action against him. The issue in dispute is whether Toth or a former employer was responsible for that failed disclosure.Toth testified that he informed his former employer of all disciplinary actions against him prior to the electronic filing of the Form U4. Toth’s former employer testified that Toth did not inform him of the New Jersey civil action, and that Toth did not review and correct a copy of the Form U4 that the former employer forwarded to him, despite repeated requests for him to do so. FINRA made a credibility determination in favor of the former employer’s version of events, which Toth unsuccessfully appealed..

http://sec.gov/litigation/opinions/2008/34-58074.pdf (SEC Decision)

The FINRA National Adjudicatory Council Decision