Last week I posted a blog about the dangers of not heeding findings made during a regulatory exam, at least findings of clear, undisputable compliance issues that cannot be meaningfully defended. Today I am writing to highlight a corollary rule: if one customer points out the existence of a real problem, again, a clear problem
Compliance
Barclays AWC Teaches Important Lessons About The Price To Pay For Not Heeding Exam Findings
By Alan Wolper on
There is no question in my mind that the quality of FINRA examiners is a bit uneven. Some are smart and insightful and helpful; others are, well, not. Most of the time, they do know what they’re talking about. That means the opportunity to make legitimate arguments against exam findings can, at least sometimes, be…
Let’s Hear It For CCOs; After All, They Are Human People
By Alan Wolper on
We have frequently blogged here about the degree of attention that regulators pay to Chief Compliance Officers, and whether it is proper that they sometimes are named individually in Enforcement actions. And we are hardly the only ones who see this issue. The New York City Bar back in February – I know, that seems…
FINRA’s 2019 Examination Priorities Letter: Beware, More Of The Same Is Coming
By Alan Wolper on
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…
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,…