Broker- Dealer Law Corner

Broker- Dealer Law Corner

Tag Archives: registered rep

FINRA’s Board Continues To Bend In the Wind Of Criticisim

Posted in Arbitration, Board of Governors, Enforcement, FINRA, PIABA, Registered Representative, Rogue rep, Rule 2010, Sanctions
On Wednesday, the FINRA Board met and discussed two topics that I recently blogged about: recidivist brokers and unpaid arbitration awards.  In predictable fashion, FINRA withered in the face of criticism that its existing rules and policies are somehow not tough enough on its member firms, and embarked on a proposed series of steps that,… Continue Reading

As Berthel Fisher Just Learned, Those Who Don’t Know FINRA’s History Of Disciplinary Actions Are Doomed To Repeat It

Posted in Disciplinary Process, Enforcement, FINRA, Supervision
I have often used these posts to lament the fact that FINRA consistently acts as an enforcement driven group of crazed examiners, hell-bent on writing firms up for technical violations, at best, uncaring about the dramatic ramifications of their seemingly ceaseless attack on well-meaning broker-dealers and their owners. While I still harbor those feelings, occasionally… Continue Reading

When FINRA Can’t Discipline The Firm, Individuals Pay The Price

Posted in CCO liability, Disciplinary Process, Enforcement, FINRA, Rule 3010
There has been a lot of discussion over the past few years, including in this blog, about the growing – and troubling – trend for Chief Compliance Officers to be named as respondents in disciplinary actions.  While regulators regularly deny that they truly have it out for CCOs, as is often the case, their actions… Continue Reading

It Can Pay To “Lawyer Up” When Dealing With FINRA

Posted in Defenses, Disciplinary Process, Enforcement, Examination, FINRA, OTR, Registered Representative, Sanctions
I realize that the title of this blog post may sound self-serving, so I apologize for that up front, as it is not my intent.  Still, there is a lesson here to be learned. I got a phone call yesterday from a reporter asking me to comment on a disciplinary action that FINRA had just… Continue Reading

Is There A Catch-22 To Fighting FINRA Charges?

Posted in Defenses, Disciplinary Process, Enforcement, FINRA, Registered Representative, Sanctions
Here is a fascinating analysis by my partner, Michael Gross, of FINRA’s twisted logic when it comes to sanctions:  your very decision not to admit liability and to put FINRA to its proof can, and will, be held against you when it comes time to determine the appropriate sanctions. Or will it?  –  Alan The FINRA… Continue Reading

Frequently Asked Questions About FINRA Rule 8210

Posted in Disciplinary Process, Enforcement, Examination, FINRA, Rule 2010, Rule 8210, Sanctions
As readers of this Blog know, Rule 8210 is a favorite subject of mine to complain about, particularly the frightening vigor with which FINRA constantly tests the limits of the rule.  What follows are some very helpful FAQs about Rule 8210 from Michael Gross.  –  Alan The Scope of the Rule Can FINRA really ask… Continue Reading

The Wendell Belden Case And Its Progeny: Fiduciary Before Fiduciary Was Cool

Posted in Fiduciary duty, Fiduciary Standard, FINRA
The entire securities world is anxiously awaiting the implementation of the fiduciary standard over retirement accounts, and, by most accounts, the eventual spread of that standard to ordinary investment accounts. I am not prepared to argue that this is not a big deal, and will cost the industry a ton of time and money to… Continue Reading

The Long Arm Of The Law Has Nothing On FINRA’s Reach

Posted in Disciplinary Process, Enforcement, Examination, FINRA, Registered Representative, Rule 2010
So, you’re a registered rep, working for a broker-dealer. Necessarily, you are registered with and subject to the oversight of FINRA, not a particularly happy proposition.  But at least you can take comfort in the fact that while FINRA may have the right to stick its nose into your securities business, what you do away… Continue Reading

Altering Documents In A FINRA Arbitration Can Have Consequences That Go Well Beyond The Arbitration Itself…At Least For Respondents

Posted in annuities, Arbitration, Disciplinary Process, Discovery, Enforcement, FINRA
The FINRA investigative process and the arbitration process exist side-by-side; at times, the misconduct that is alleged by a claimant in a Statement of Claim may simultaneously be the subject of an examination by Member Regulation, or even an Enforcement Complaint. Ordinarily, Enforcement doesn’t pay much attention to what happens in a parallel arbitration, except… Continue Reading

Updates: Two Losers + One Positive Note = A Bad Week For Broker-Dealers

Posted in Administrative Proceedings, appeal, Disciplinary Process, Enforcement, FINRA, Research analyst, Rule 2242, Rule 2711, SEC
There have been some developments this week in a few matters on which I have previously offered my views. To help you stay on the cutting edge of financial world current events as you mingle at your upcoming Cinco de Mayo fiestas, here are three updates.  Two, not surprisingly, represent wins for the regulators.  The… Continue Reading

A Miscellany Of FINRA Issues A Little Too Big To Call Nitpicking

Posted in Arbitration, Compliance, Disciplinary Process, Enforcement, FINRA, PIABA, Registered Representative, Sanctions, Wells process
For some reason, a bunch of noteworthy events all happened around the same time this week, so please bear with me as I vent a little about them.  Individually, they are irritating; in the aggregate, they are borderline alarming. First, the FINRA Wells process. I have blogged about this before, and how, in a couple… Continue Reading

The Devil Is In The Details When It Comes To Enforcing Arbitration Agreements With Registered Reps

Posted in Arbitration, FINRA, Form U-4, Registered Representative
It should be abundantly clear to everyone that BDs are required to arbitrate disputes with their registered reps. There are several reasons I can assert this with such a great deal of certainty.  First, and most obvious, there is a rule about it.  Rule 13200(a) of the Code of Arbitration Procedure provides that [e]xcept as… Continue Reading

If You’re a Respondent, Time is NOT on Your Side

Posted in Arbitration, Defenses, Disciplinary Process, Enforcement, FINRA, Registered Representative, SEC
There was a decision this week from the D.C. Circuit Court of Appeals on an appeal of a decision by a respondent who – stop the presses! – lost an SEC administrative proceeding, and then lost his appeal to the SEC. Montford and Company, Inc. v. SEC, No. 14-1126 (July 10, 2015). One of the… Continue Reading

Problems with Registration of Registered Reps, Part 1: Does Anyone Actually use BrokerCheck?

Posted in BrokerCheck, FINRA, Form U-4
I read with great interest the recent flurry of articles in the financial news, including one appearing on the front page of the Wall Street Journal, about the supposed flaws with FINRA’s BrokerCheck due to the fact that it omits from public view some items, e.g., certain misdemeanor convictions and financial issues (unsatisfied liens or… Continue Reading
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