The day after Christmas, FINRA issued a press release announcing that five big firms – Citigroup, J.P. Morgan Chase, LPL, Morgan Stanley and Merrill Lynch – had each entered into a settlement, collectively agreeing to pay a $1.4 million fine. Their offense? They each violated FINRA’s supervisory rules because for a number of years, dating…
From time to time, I have lamented that FINRA does not hold itself to the same lofty standards to which it holds its members. I realize I am painting with a broad brush, as there are lots of folks at FINRA who do a great job, who are easy and reasonable to deal with, and…
My partner, Heidi VonderHeide, has busied herself these last few months learning everything she can about Reg BI. Happily, here is her post on the subject, and it doesn’t predict gloom and doom in the new year as that regulation is implemented. – Alan
Just before the Holidays, I attended FINRA’s one-day Reg BI seminar…
This post is about Reg BI, but if you really want to learn about it, as opposed simply to listening to me gripe, I urge you to register for the webcast that my partners Heidi VonderHeide and Rob Betman will present on Wednesday, December 11, 2019, at 2:00 PM EST. It is just one of…
In December, Ulmer & Berne is hosting four financial services webcasts, the first of which I will be presenting along with my partner, Michael Gross: FINRA 2019: A Look Back, and Thoughts About What Lies Ahead (Wednesday, December 04, 2019, 2:00 PM EST). The others are The Anatomy of a Whistleblower Action: Procedure, Practice Pointers…
Here is how PIABA’s one-track mind operates: in a Report it just issued, PIABA laments the frequency with which registered reps are able to get customer complaints expunged from their records. The sole reason for this, PIABA concludes, is that the expungement process is broken, and/or is being gamed by brokers. It does not even…
In the past week, I ran across two discrete instances in which FINRA acts as a secret gatekeeper of sorts, exercising its own subjective judgment, without anyone knowing what, exactly, it is doing or why, employing unarticulated standards, and without providing any avenue for redress. And I find that really frightening.
The first involves CRD,…
Last year, for the first time, FINRA produced a statistical report designed to provide some perspective on the firms that comprise its membership. I blogged about it, and concluded at the time that the report basically demonstrated the following:
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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 that FINRA imposes, as they tend to be fairly modest, e.g., a fine of $5,000 or less plus a suspension, maybe of 30 or 60 days in length. No, the problem is that FINRA often likes to characterize these failures as “willful,” which results in the registered rep being statutorily disqualified from continuing to work in the securities industry, necessitating the filing of a MC-400 application to seek FINRA’s approval to remain a registered rep notwithstanding the modest nature of the rule violation.
Well, this week, FINRA accepted a very interesting AWC from J.P. Morgan Chase, which included a $1.1 million fine, as a result of the fact that JPMC failed to update the Forms U-5 of 89 former registered representatives, over a six-year period, to disclose the fact that these RRs were the subject of an internal review concerning allegations that they had misappropriated or transmitted “proprietary Firm information,” took customer information in connection with the transfer to another broker-dealer, or violated some “investment-related banking industry standard of conduct.”[1] A repeat violation for the firm, too.…
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