Broker- Dealer Law Corner

Broker- Dealer Law Corner

Category Archives: FINRA

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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

FINRA Proposes To Dispense With Due Process, All Because It’s Failed To Do Its Job Of Policing The Markets

Posted in Disciplinary Process, FINRA, High-Risk firms
Reading Reg Notice 19-17 makes me think of the legal arguments that I’ve recently read regarding whether a president can be found guilty of obstructing justice if the actions in question were taken out in the open, for everyone to see. Here, FINRA’s proposed power grab is simply outrageous, but, you got to give them… 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

Is FINRA’s New Regulatory Notice On Departing Reps A Unicorn?

Posted in Disclosure, FINRA, Registered Representative
FINRA came out with a slightly weird Regulatory Notice last week. In a succinct document, barely over two pages, FINRA addressed something that may, or may not, actually be of concern to anyone. In short, Regulatory Notice 19-10 states FINRA’s position on what a broker-dealer is supposed to tell the customers of a registered representative… Continue Reading

FINRA Is Going After “High-Risk” Firms, But First Has To Invent The Definition Of High-Risk

Posted in FINRA, heightened supervision, High-Risk firms, Rogue rep
I told you two weeks ago in my blog post that this would happen. I told you that when Robert Cook announced the topics to be taken up at the February/March FINRA Board meeting in Boca Raton, he slipped and used the new phrase “high-risk firms.” Well, in yesterday’s announcement about what actually took place… Continue Reading

Does FINRA Have Jurisdiction Over Me?

Posted in Arbitration, FINRA
Does FINRA have jurisdiction over me? This is a question that I regularly field at the outset of regulatory engagements. My answer differs depending on a number of factors, including the nature of a person’s role and duties at a firm, his or her registration status, when the alleged misconduct occurred, whether he or she… Continue Reading

The Securities Regulators All Have Senior-itis. Maybe For Good Reason.

Posted in FINRA, Rule 2165, Rule 4512, Senior Investors
The securities industry’s concern over the aging of the U.S. population, specifically, aging investors, has, apparently, reached a fever pitch. Yesterday in New York, SIFMA hosted its “Senior Investor Protection Conference – One Year Later: FINRA Rules 2165 and 4512,” and, for a securities conference, it received pretty extensive news coverage. I saw at least… Continue Reading

FINRA’s 529 Share Class Self-Disclosure Initiative: If It’s Good Enough For The SEC, It Must Be Good Enough For FINRA

Posted in 529 Plan, FINRA
About a year ago, the SEC offered investment advisors the unique opportunity to report themselves to the SEC if they sold mutual funds to their clients that offered a lower priced share class than the class actually selected by the advisor, but failed adequately to disclose the conflict of interest that created.  For those advisors… Continue Reading

FINRA’s 2019 Examination Priorities Letter: Beware, More Of The Same Is Coming

Posted in Compliance, Examination, FINRA, Rogue rep
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… Continue Reading

Yes, You Can Form A Broker-Dealer Without Running Afoul Of FINRA’s Outside Business Activities Rule

Posted in FINRA, Outside business activities, Rule 3270
It is not a wise career move for a registered rep to leave his broker-dealer – thereby abandoning his customers, and affording competitors the opportunity to make his customers their own – and then to begin the long, expensive, and uncertain process of forming a FINRA-registered broker-dealer. Common sense, principles of fundamental fairness, and good… Continue Reading

The Disturbingly Cozy Relationship Between FINRA And PIABA

Posted in Arbitration, FINRA, PIABA
What exists at the point where PIABA’s transparent self-interest in getting paid and FINRA’s historical lack of transparency about who is actually driving its agenda regarding arbitrations? This: a late December decision by FINRA to propose a rule that prohibits non-lawyers from representing – for a fee – customers in arbitrations, and an even more… 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
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