In what has become an annual, but hardly exciting – I mean, it’s not like anxiously awaiting the day that pitchers and catchers report to Spring Training – tradition, with the turning of the calendar to the new year, FINRA has once again released a letter announcing what it deems to be its priorities for
Compliance
Tips For Staying Off The SEC’s Naughty List In 2019
By Blaine Doyle on
I recently had to the opportunity to sit in on a talk from high ranking CFTC and SEC enforcement officials at a local bar association meeting. The purpose of the get together was, in part, to let industry folks and their lawyers know what the regulators will be focusing on in the near future in…
Reverse-Churning: BDs Are Damned If They Do, And Damned If They Don’t
By Alan Wolper on
A couple of years ago, I blogged about the concept of “reverse churning,” i.e., putting a customer who trades only infrequently into a fee-based account, thus costing the customer a lot more than it would have cost that customer to be in a commission-based account. The reason this became a topic was, at the time,…
Can FINRA Deliver On A Promise To Provide Meaningful Relief To Compliance Departments?
By Alan Wolper on
As I have discussed before, there are some rule violations that are going to happen no matter what FINRA says about them, no matter how many Enforcement cases it brings, and no matter what BDs do to “detect and prevent” such violations. A prime example of such is outside business activities, or OBAs. The rule…
FINRA’s Exam Guidance Is A Big Yawn
By Alan Wolper on
As promised, FINRA has released its first Report outlining common findings from its examinations, in an effort to help member firms comply with the rules and, presumably, avoid problems that other firms encountered. A noble idea, especially for an entity not exactly known (at least lately) for its proactive measures to assist BDs with their…
What Is FINRA’s Job?
By Alan Wolper on
Posted in Compliance, FINRA
A client of mine bought a BD, thereby requiring him to go through the CMA process. It was a very small firm, with fewer than ten registered reps. He was a newly minted 24, so he had other, more experienced principals on board to handle all supervisory responsibilities. His job, as outlined in the firm’s…
Open The Pod Bay Doors: Computers Are Here To Take Your Job
By Alan Wolper on
I read recently that in the not-too-distant future, the practice of law by actual human beings will become a rarity, as computers will take over those jobs, because they will be able to do the work better, cheaper and faster. Speaking as a lawyer, I find that to be a somewhat troubling prospect. I mean,…
Where’s The Beef? The SEC Complains That Filing A SAR Isn’t Enough If It Skimps On Details
By Alan Wolper on
Many of my clients chafe at the AML rule, given the cost of compliance and the even higher cost of defending an Enforcement action if the regulators conclude that red flags were somehow missed, or spotted but not dealt with adequately, or soon enough, or both, or spotting the red flags, responding to them, but…
The Nuts And Bolts Of FINRA’s New Financial Exploitation Rule
By Michael Gross on
A few weeks ago, I posted a blog about FINRA’s new rule concerning senior investors. My take was largely that the rule made sense, but only to the extent that it provides protections for BDs that encounter the need to share otherwise confidential information about a customer due to concerns about the customer’s health…
Supervision Requires More Than Trust; It Means Trust With Verification
By Alan Wolper on
Back in December, the State of Massachusetts filed a Complaint against LPL and one of its big producers alleging that the producer, Roger Zullo, defrauded his clients and lied to his supervisors in connection with the sale of variable annuities. What struck me when I read the Complaint, and what has still stuck with me,…