Broker- Dealer Law Corner

Broker- Dealer Law Corner

Tag Archives: registered representative

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

Sticks And Stones May Break Your Bones, But Words Will Get You Barred

Posted in Enforcement, FINRA, Registered Representative, Rule 2010, Sanctions
I have been meaning to write something about this recent NAC decision for a while now, but I am still not really sure what to make of it.  I suppose it stands for two propositions.  First, there is almost nothing that a registered rep can do without FINRA sticking its nose in, regardless of whether… 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

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

Not So Naked And Not So Afraid: FINRA’s New Compensation Rule Does Not Require Brokers To Bare All (Financially) When Changing Firms

Posted in Compensation, Compliance, Disclosure, FINRA, Hiring practices, Rule 2272
Two years ago, FINRA first proposed to the SEC a rule that would require brokers to disclose to clients not only when they receive compensation (including signing bonuses and other payments) to switch from one broker-dealer to another, but, worse, the amount of that compensation. The industry was seriously not pleased with the rule.  FINRA,… Continue Reading

Highlights from Day One of SIFMA-CL Conference

Posted in Best execution, CCO liability, Culture, Fiduciary duty, Fiduciary Standard, FINRA, municipal securities, SEC, SIFMA, Supervision
Opening Session/Firm Culture/CCO Liability. If you are reading this blog, then you, like me, have been probably eagerly waiting for the start of SIFMA’s annual Compliance and Legal conference not just for the jumbo shrimp at the reception, but also to learn some insights from the regulators about their concerns and intentions. If you attended… 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

FINRA’s 2016 Examination Priorities Letter: Focus On “Firm Culture”

Posted in Compliance, Expungement, FINRA, Senior Investors, Suitability, Supervision
Yesterday, FINRA released its annual Examination Priorities Letter in which it set forth the top issues that would guide its examinations in the coming year. Running 13 pages in length (while complaining about having to be so “brief”), FINRA set forth some of the “many areas of potential concern” it expects to encounter this year.… Continue Reading

NASAA Releases Its List Of Top Five “Investor Threats”: Same As It Ever Was

Posted in Annual Report, NASAA
Right around Christmas, NASAA, the North American Securities Administrators Association, which is comprised of the securities regulators from each of the 50 states, released its annual list of the top five threats to investors.  To compile the list, NASAA polled each state’s securities commissioner to learn the “the five most problematic products, practices or schemes.” … 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

What In The Wells Is Going On With FINRA’s “Wells” Process?

Posted in Defenses, Disciplinary Process, Enforcement, FINRA, Settlements, Wells process
With any luck, you can go your entire career in the securities industry without ever participating in the dreaded “Wells process.” And that’s a good thing, as the Wells process occurs only after FINRA has completed an examination and has concluded that whatever it has encountered is so serious that a formal disciplinary action is… Continue Reading

(Another) Landslide Victory: FINRA Enforcement Offers ZERO Evidence Of Fraud

Posted in Disciplinary Process, Enforcement, FINRA, Private Placement, Sanctions
At the end of last week, we received our second[1] decisive win in a FINRA Enforcement case in a matter of days. Following a two-day hearing back in July, the hearing Panel dismissed all charges against our clients Paul J. McIntyre and MSC-BD, LLC. While any victory is nice, and doing justice for a client… Continue Reading

Nobody’s Perfect (And Even FINRA Finally Acknowledged It)

Posted in Compliance, Disciplinary Process, Enforcement, FINRA, Statutory Disqualification
Fans of this blog (or, at least, readers of this blog who are fans of Jeopardy) will no doubt remember Alan’s prior post, published a few weeks ago, and discussing a recent case that FINRA’s Department of Enforcement brought against one of our clients. From the very beginning, we, as her counsel, were both bewildered… Continue Reading

Quick Hits: That’s Right. The Hits Keep Coming for Registered Individuals

Posted in Arbitration, BrokerCheck, FINRA, Form U-4, Registered Representative
A couple of events caught my attention this week and, since they are related, I thought I’d address them together. On Monday, the SEC announced a proposed rule change to FINRA Rule 8312, the FINRA BrokerCheck Disclosure Rule. Rule 8312 permits FINRA to disclose certain information on BrokerCheck about registered individuals. As many of you… Continue Reading
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