Here are my thoughts after Day One.
At a minimum, you would have to admit that FINRA has a sense of humor: the song they played when Rick Ketchum, FINRA’s Chairman, was introduced to give his keynote speech was “Why Can’t We Be Friends,” the 1975 song by War. Predictably, there were few laughs after…
I am in DC, to attend the annual FINRA conference that starts tomorrow morning. I have been to many of these over the years, formerly as the Director of NASD’s Atlanta District Office, but, over the last ten years, as a lawyer who defends brokers and broker-dealers against, among other things, FINRA allegations of misconduct.…
The SEC has faced mounting criticism recently for its increasing use of administrative proceedings in enforcement matters. Numerous lawsuits have been filed against the agency, challenging its forum selection. Judge Jed Rakoff of the U.S. District for the Southern District of New York has made it very clear he has serious fairness and constitutionality concerns…
Look, I get that nobody’s perfect. We all make mistakes, it’s just human nature. I told my kids when they were growing up the same thing I tell my associates: it’s ok to make mistakes, it’s just not ok to repeat them. Sadly, my broker-dealer clients live in a heavily regulated environment, so when they…
Just a week ago, I ran a post about FINRA’s Sanction Guidelines, suggesting that they appear to have no relevance anymore, given the vast disparity between fines that FINRA is actually imposing in settled cases, on the one hand, and the supposed maximum fines described in the Sanction Guidelines, on the other. In an excellent…
In a recent blog post, I wrote about the challenge a rapidly deteriorating change in mental capacity can cause BDs and RRs alike. Often, we are asked to speak to groups and firms, and this subject is a popular one. In my view, there are a couple of reasons for this development.
First, FINRA has…
I read with interest the press release FINRA issued this week announcing an $11.7 million settlement with LPL, principally over what FINRA characterized as “widespread supervisory failures.” There were two things most noteworthy to me.[1] The first, interestingly, is not the size of the monetary sanctions (a $10 million fine plus $1.7 million in…
Obviously, given the name of this blog, the focus is on broker-dealers, but we also have a robust practice advising RIAs and investment management companies. In that vein, a group of attorneys working in our Cleveland office published a Client Alert today that discusses a recent Investment Management Guidance Update published by the SEC.
The…
I read today about a lawsuit that two registered persons, one of whom is a Chief Compliance Officer, filed against FINRA in federal court a couple of weeks ago. Mind you, lawsuits against FINRA are not particularly common, given the fact that FINRA has “absolute immunity” against monetary claims arising out of its regulatory activities.…
Before I became a District Director for NASD, I was an attorney with its Department of Enforcement. In those days, I would occasionally take someone “on the record,” but only when it was clear that a formal disciplinary action, i.e., a complaint, would be forthcoming. The purpose of the OTR was principally to memorialize and…
