Federal regulators have dismissed a November 2004 complaint against H&R Block Inc.'s brokerage business. The civil fraud charges had alleged sales practices and supervisory violations tied to the sale of Enron Corp. bonds to investors prior to the company's failure in 2001.

The Kansas City Star said the Financial Industry Regulatory Authority (FINRA) issued a 56-page dismissal of the charges on Friday. FINRA succeeded the National Association of Securities Dealers, which had brought the charges against H&R Block near the end of 2004.

The charges stated that H&R Block failed to disclose the bonds' risk including, according to The Star, "credit ratings downgrades, Enron's earnings restatements, a Securities and Exchange Commission investigation of Enron, and Enron's warning that it might not be able to continue as a going concern."

H&R Block, which is based in Kansas City, sold Enron bonds one month before Enron filed for bankruptcy protection on Dec. 2, 2001. The allegations involved sales made by 54 H&R Block Financial Advisor employees to more than 90 customers between October 29 and November 7, 2001, the Kansas City Business Journal reported.

CNNMoney.com reported that FINRA's panel said the agency's department of enforcement failed to present a preponderance of evidence that H&R Block misrepresented or omitted facts in connection with the sales.

H&R Block denied the charges and requested a hearing, which was held in three states for a total of 24 days from May 2006 to August 2007, The Star reported. The panel determined that brokers for H&R Block had recommended small purchases and made presentations that were reasonably balanced to customers and only sold Enron bonds to customers for whom they were suitable.

FINRA is the largest non-governmental regulator for all securities firms doing business in the United States.