In a recent new release, the Tennessee Securities Division urged investors to ask tough questions of their investment advisors, and about their compensation, account arrangements and educational / regulatory history. The May...more
Richard Ketchum, the retiring CEO of FINRA, said that the regulator intends to expand the reporting available through its BrokerCheck® web tool to include relative concentrations of disciplined brokers in industry firms....more
An article in this weekend’s Wall Street Journal called for FINRA to make the database underlying its BrokerCheck® system (of reports on stockbroker registration and disciplinary history) more widely available for data mining...more
The Fifth Circuit Bar Association’s summary reports:
“Appellants were investors who suffered financial losses as a result of R. Allen Stanford’s Ponzi scheme. In their arbitration complaint, they sought $80 million in...more
FINRA reported that, for 2015, Claimants won about half of private securities arbitrations: 47% for all-public panel decisions; 45% for majority-public panels. A colleague and securities mediator, Dana Pescosolido, recently...more
FINRA released its annual Regulatory and Examination Priorities Letter (so-called “Errico Letter”) on January 5. FINRA’s top five priorities: Among the also-rans, industry participants will recognize many perennial favorites,...more
As 2015 ended, FINRA fined Barclays Capital $13.75 million for mutual-fund switching and breakpoint supervisory failures that might have been avoided if that part of Barclay’s WSPs had been properly calibrated and/or part of...more
FINRA’s Dispute Resolution Task Force issued its Final Report in mid-December. The Report reflects the group’s consideration of wide-ranging issues affecting the nation’s principle dispute-resolution forum for broker-dealers,...more
On December 16, FINRA submitted for SEC approval proposed Rule 2273 to require that brokers send customers an “educational disclosure” when changing firms. Although the proposal deletes a controversial provision that would...more
Last week FINRA proposed for SEC adoption a “pay-to-play” rule for broker-dealers engaged in distribution or solicitation activities with government entities. The Proposed Rule is modeled after investment-adviser pay-to-play...more
FINRA Reg. Notice 15-37 (Oct. 2015) requests prompt comment (by November 30) on proposed Rules aimed at detecting and minimizing financial exploitation of seniors and other “vulnerable” adults....more
The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) issued a recent “Risk Alert” noting observed deficiencies in broker-dealer supervision and compliance controls over retail sales of structured products –...more
9/4/2015
/ Broker-Dealer ,
Brokers ,
Compliance ,
Due Diligence ,
Elder Issues ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Fixed Income Investments ,
Investment ,
Investors ,
OCIE ,
Risk Alert ,
Securities and Exchange Commission (SEC) ,
Structured Financial Products
In a September 2 Alert, FINRA warns that scammers are using messaging app spam-casts to impersonate brokers and tout micro-cap stocks to “pump” their prices, before “dumping” their positions at the top and leaving investors...more
9/3/2015
/ Brokers ,
Email ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Mobile Apps ,
Pump and Dump ,
Securities and Exchange Commission (SEC) ,
Social Media ,
Social Networks ,
Spam
FINRA this week released its targeted exam letter requesting information on firms’ conflict-of-interest policies surrounding broker compensation and retail accounts.
The sweep follows up on FINRA’s Conflicts Report from...more
The Financial Institutions Regulatory Authority fined a UBS unit $750,000 for mistakenly reporting customers’ municipal-bond-account interest was tax-exempt, when the firm’s handling of the trades made it taxable instead....more
FINRA issued its late-July Regulatory Notice 15-27 warning brokerage firms that inadvertent short positions or fail-to-delivers in municipal securities trading can create situations where the member-firm pays a customer...more
8/4/2015
/ Brokerage Accounts ,
Compliance ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
IRS ,
Municipal Bonds ,
Municipal Securities Issuers ,
Municipal Securities Market ,
Regulatory Standards ,
Tax Deductions ,
Tax Exemptions
The Financial Industry Regulatory Authority’s disciplinary appellate body (the National Adjudicatory Council or NAC) has revised the Sanction Guidelines used to determine penalties in enforcement cases. The revisions increase...more
FINRA Dispute Resolution filed with the SEC a proposed change to Code of Arbitration Rules 12214 and 12601 (and industry Rules 13214 and 13601) to increase late cancellation fees from $100 to $600 per arbitrator and expand...more
An all-public panel of FINRA arbitrators entered a preclusion order and awarded $750,000 in punitive damages for Respondents’ failure to participate in discovery and disregard of pre-hearing filing requirements....more
The Financial Industry Regulatory Authority (“FINRA”) released its 10th annual Exam Priority Letter earlier this week (Jan. 6, 2015). The so-called “Errico Letter” advises broker-dealer member firms of the operational risks...more
Last Friday, FINRA proposed pay-to-play prohibitions that parallel and implement similar Investment Adviser Act provisions in Rule 206(4)-5. That IA Rule prohibits investment advisers from paying third-parties to solicit...more
Since 2004, FINRA has required its member firms to include in settlement-agreement confidentiality clauses an exception expressly allowing a customer to respond to regulatory inquiries. See Notice to Members 04-44. FINRA...more
Carlo DiFlorio, FINRA’s Chief Risk Officer and Head of Strategy, told the annual meeting of the National Society of Compliance Professionals Monday that FINRA is emphasizing efforts to mitigate market risks, even as it...more
The Second Circuit stayed its mandate last week to allow public-pension litigants to file cert petitions seeking review of its August holding that a subsequent account-agreement forum-selection clause requiring federal-court...more
FINRA celebrated its 75th Anniversary this September 18. It is the “largest independent regulator for all securities firms doing business in the United States,” with a notionally voluntary membership of over 4,100 securities...more