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,
Enforcement
Gamification: Regulators Should Try The Investor Education Game
By Michael Gross on
The controller has been passed to a new team of players in Washington. New players prefer to hit the reset button and start a new game, not pick up where the prior player left off. We know how our new players like to play the game. They want to control every aspect of the game…
You Should Understand The Difference Between Violating A Firm Policy And Violating A FINRA Rule . . . Even If FINRA Doesn’t
By Alan Wolper on
I am writing this while flying home from my first business trip in over 15 months. I have to tell you, it is more than a bit of a strange feeling to be out and among people again. While my face is sore from wearing this N95 mask nearly non-stop for three days, my hands…
Credit Suisse Runs Into Trouble Trying To Monitor Outside Brokerage Accounts, Despite Its Best Intentions
By Alan Wolper on
I am back from Spring Break — spent here, in my home, of course — and I hope that you all had a nice Easter or Passover, or whatever. Good to be back. – Alan
Sometimes, the numbers that FINRA cites in its settlements with big broker-dealers are so ridiculously large that it’s nearly impossible…
If You Supervise Yourself — Which You Cannot Do — Make Sure You Do It Right
By Alan Wolper on
I have always operated with the understanding that, per FINRA rules, one cannot supervise him- or herself. Hardly an outrageous proposition. Today, however, that fundamental, bedrock understanding was so shaken, it has left me wondering whether anything is what it seems (especially when coupled with Loyola’s win this weekend over Illinois, which, really, can only…
SEC Not Only Reverses FINRA Disciplinary Action, But Provides Blueprint For Respondents To Use In Their Defense Of Similar Claims
By Alan Wolper on
My friend and former colleague, Brian Rubin, publishes annually his analysis of FINRA Enforcement cases, spotting trends in terms of the number and types of matters it brings, the sanctions meted out, etc. It is an excellent tool, and eagerly anticipated by lots of us who practice in this industry. One of the hard parts…
The (Possible) Benefit Of Self-Reporting And Internal Discipline
By Alan Wolper on
Historically, one of the surest ways to get yourself permanently barred from the industry is to forge a customer’s signature on something. According to the pertinent Sanction Guideline, at a minimum, a forgery, that is, a true forgery – a signature that is neither authorized nor subsequently ratified by the customer – should result in…
Another Fine Churning Mess
By Alan Wolper on
I apologize for taking so long between posts, but, to be fair, there’s been a lot going on in the past week or so that has captured my attention! I wish everyone a happy and SAFE new year! – Alan
While undoubtedly FINRA will be issuing its annual “examination priorities” letter any day now, that…
How NOT To Supervise For Churning
By Alan Wolper on
As should be clear to readers of this Blog, I find that Enforcement actions often provide the best guidance in terms of what regulators deem to be unacceptable conduct, which is very useful when dealing with subjective standards like “reasonableness.” This past week, FINRA published an AWC submitted by Coastal Equities, Inc. that offers a…
FINRA Zoom Hearing Goes BOOM!
By Alan Wolper on
Attentive readers will recall that a couple of weeks ago, I mentioned in a preface to great post from Chris about expungement becoming an endangered creature due to changes in FINRA rule that I was about to embark on a two-week FINRA Enforcement hearing, all done by Zoom, by consent. I promised to provide some…