I have watched enough medical shows over the years, from the awesome St. Elsewhere to the never-ending Grey’s Anatomy, to have heard umpteen times that the Hippocratic Oath includes the admonition that doctors “do no harm.” While, apparently (according to Google, anyway), Hippocrates may or may not have ever actually said that, everyone gets the
Enforcement
The High Price Of Fighting – And Beating – The SEC Can Make Settling An Acceptable Solution
When I am engaged to defend a case, whether it’s a customer arbitration or a regulatory complaint, my clients typically get to the point, sooner or later, where they ask me two questions: (1) what do I think about their chances of winning, and (2) what’s it gonna cost me. In many matters, the answer…
Time Never Matters To Regulators, Until It Does
As the song goes, time keeps on slipping, slipping, slipping into the future. While Steve Miller may not have had FINRA and the SEC in mind when he wrote that lyric, the shoe certainly fits. Because here’s the thing about the passage of time, at least in FINRA/SEC world: typically, regulators pay it little attention. …
Determining Chief Compliance Officer Liability Isn’t Really That Confounding
About a month ago, the SEC announced a settlement in a modest little case that has, nevertheless, managed to garner a lot of attention. This is a result of the fact that one of the respondents was the CCO, i.e., the Chief Compliance Officer, of the co-respondent RIA. Determining the particular circumstances under which CCOs…
Equitable’s Settlement With The SEC Demonstrates That A Single Customer Complaint Can Serve As Notice Of A Systemic Issue
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…
Barclays AWC Teaches Important Lessons About The Price To Pay For Not Heeding Exam Findings
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…
Highlights From SIFMA’s Compliance And Legal Seminar 2022
Thanks to Chris for not only making the personal sacrifice of traveling from frigid Chicago to sunny Florida to attend the SIFMA Compliance and Legal conference last week, but for providing these helpful comments about the sessions he attended. – Alan
I attended the four-day SIFMA Compliance and Legal seminar last week, and there…
FINRA Continues To Turn Its Back On Its Members By Failing To Pass A Popular Rule
There are certain topics that broker-dealers have been encountering for decades, yet continue unnecessarily to wrestle with due to the absence of clear guidance from the regulators. I have written about one such topic before, and that’s the fuzzy line between most outside business activities, which RRs are obliged (at a minimum) by rule to…
A Sad Story Of Regulators Simultaneously Doing Too Much And Too Little
Not too long ago, a single, small BD experienced a bizarre combination of regulatory overzealousness and regulatory indifference, by the SEC and FINRA, respectively. These things, sadly, happen all the time, but what happened to this unfortunate firm presents an excellent case study in regulators who simply do not wield their considerable prosecutorial discretion in…
For FINRA, Unlike The SEC, Blaming The BD Always Seems To Be The Answer
FINRA Enforcement has often been accused (again, admittedly, by me, and not too infrequently) of going after the “low-hanging fruit,” that is, taking the easy case when it presents itself. Putting aside the question whether this observation is accurate or not – for what it’s worth, I think the answer is that it is often,…