Broker- Dealer Law Corner

Broker- Dealer Law Corner

Category Archives: Enforcement

Subscribe to Enforcement RSS Feed

It Is Not Possible To Predict When FINRA Will Charge Something As Willful. Or Is It?

Posted in Disciplinary Process, Enforcement, FINRA, Willfullness
I have written a few times about FINRA’s ceaseless interest in bringing cases against registered reps who fail to update their Form U-4 in a timely manner to disclose the fact that a tax lien has been filed against them.  Or several tax liens.  The problem with these cases is not so much the sanctions… Continue Reading

A Glaring Example Of FINRA Dragging Its Feet, Culminating In A Pointless Default Decision

Posted in Disciplinary Process, Enforcement, Examination, FINRA
FINRA loves to tout its supposed intent to bring meaningful cases, cases that matter to the investing public, rather than enforcing “foot faults,” as it has been accused of doing over the years. My own experience with FINRA suggests that while it talks a big game, in reality, we all still live in foot-fault city.… Continue Reading

FINRA Touts The Fact That Its Examinations Need Not Be “Fair”

Posted in Disciplinary Process, Enforcement, Examination, FINRA
While I feel I have enjoyed as much success defending respondents in FINRA Enforcement matters as anyone, I am still careful to caution clients who are unwilling to consider any settlement that going toe-to-toe with FINRA at a hearing is always a difficult proposition, even though they are presumed innocent and FINRA bears the burden… Continue Reading

Voya Settlement Shows That Self-Reporting To FINRA Can Pay Off

Posted in Disciplinary Process, Enforcement, FINRA, Sanctions
I have written before about the troubling lack of clarity regarding the tangible benefit of self-reporting rule violations to FINRA. While FINRA purports to provide some potential advantage for doing so, it is so awfully loosy-goosy that it remains a relatively uncommon occurrence. That’s why when a case comes down that provides some clear indication… Continue Reading

FINRA AWC Includes Waiver Of A Fine: Is This A Sign Of Good Things To Come?

Posted in Disciplinary Process, Enforcement, FINRA, Sanctions
Way back in 2006, NASD issued Notice to Members 06-55, which tweaked the Sanction Guidelines to allow not just the size of the firm to be taken into consideration when determining the appropriate sanctions to be meted out, but, more importantly, how well, or how poorly, the firm is doing on its income statement. Specifically,… Continue Reading

The Real Lesson From FINRA’s 2018 Exam Findings Report

Posted in Enforcement, Examination, FINRA
On Friday last week, FINRA released a report discussing the findings from its 2018 exams, providing what it described as “selected observations” that were deemed to have “potential significance.” Even with that tepid introduction, in theory, this is still a great idea, since anyone in the industry, even so-called “good” or “clean” firms, should welcome… Continue Reading

Money Talks, And FINRA Is Listening

Posted in Disciplinary Process, Enforcement, FINRA, Sanctions
Last year I wrote about FINRA’s effort to encourage firms to self-report their problems, pausing to wonder at the suggestion attributed to Jessica Hopper, a Senior Vice President with Enforcement, that cooperating with FINRA by self-reporting “not only fulfills a firm’s regulatory responsibilities, but it can also mean the difference between a slap on the… Continue Reading

BD Learns It’s Not Enough To Have A Supervisory Procedure For OBAs, You Actually Have To Follow It

Posted in Enforcement, FINRA, Outside business activities, Rule 3270, Uncategorized
In most Enforcement cases involving outside business activities, it is the registered rep who is named as the respondent, and the allegation is that the RR failed to provide notice (or timely notice) to his or her broker-dealer about the OBA. On occasion, however, it is the BD that gets tripped up, typically for not… Continue Reading

FINRA’s “Massive” Discovery Failure Results In…Absolutely Nothing

Posted in Disciplinary Process, Enforcement, FINRA, Sanctions, Uncategorized
You are not going to believe this one. Here are the unadulterated facts, taken directly from the Order entered by the FINRA Hearing Officer (an Order, by the way, which FINRA elected not to publish on its website): Five days into an Enforcement hearing against Respondent Steven Larson, “Enforcement disclosed that it just realized it… Continue Reading

FINRA’s Stated Paradigm Shift On Enforcement Actions

Posted in Disciplinary Process, Enforcement, FINRA
I have spoken about FINRA possibly putting an end to the policy of pursuing cases where formal disciplinary action serves little to no regulatory purpose. That welcome paradigm shift may be upon us. This year, FINRA, in essence, pronounced that its “broken windows” strategy of pursuing Enforcement cases over the smallest and most technical violations… Continue Reading

No Bar For Submitting False Expense Reports?

Posted in Disciplinary Process, Enforcement, FINRA, Sanctions
Here is a post from Michael about a recent settlement involving the submission of false expense reports.  The issue isn’t the misconduct, but, rather, the rather tepid sanctions imposed.  Do I sense the pendulum starting to swing back? – Alan It is no secret that FINRA’s Department of Enforcement is attempting to maintain a lower… Continue Reading

FINRA’s Board Acts To Fix The Problem…That FINRA Created

Posted in Arbitration, Board of Governors, Enforcement, FINRA
So, as you undoubtedly recall, in its typical reactive approach to regulation, FINRA has expressed concern – after having concerns expressed to it by others (none of whom are actually from the securities industry, of course) – about (1) the high number of registered reps working in the industry with spotty disciplinary records, and (2)… Continue Reading
.