By Alan Wolper on Posted in FINRAIf you are like me, and spend your idle time twiddling around the FINRA website, then you already know that FINRA publishes a variety of mathematical statistics, updated periodically, that provide, along with the sobering tally of the Enforcement actions brought and fines imposed, a good insight into the composition of the membership. Yesterday, FINRA… Continue Reading
By Alan Wolper on Posted in Arbitration,FINRAOnce upon a time, FINRA at least pretended that it was interested in maintaining a level playing field for claimants and respondents in the arbitrations it administers. Today, all that pretense has been jettisoned. In Regulatory Notice 18-22, which seeks comments on FINRA’s proposal to require respondents to produce information relating to their insurance policies,… Continue Reading
By Alan Wolper on Posted in Enforcement,FINRA,Outside business activities,Rule 3270,UncategorizedIn 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
By Alan Wolper on Posted in Disciplinary Process,Enforcement,FINRA,Sanctions,UncategorizedYou 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
By Alan Wolper on Posted in Arbitration,FINRA,PIABAAbout a month ago, I posted a blog about the apparent success that PIABA had achieved in getting two US senators — a Democrat and a Republican — to sponsor a bill to require FINRA to create a fund from which unpaid arbitration awards — and, of course, unpaid claimants’ counsel fees — would be… Continue Reading
By Alan Wolper on Posted in Arbitration,FINRA,PIABAI have written before of the ferocious effort by PIABA lawyers to fight for their ability to collect attorneys’ fees on contingency matters – FINRA arbitrations – that they manage to win but which never get satisfied because the respondent broker-dealer has the temerity to go out of business rather than paying the award. PIABA… Continue Reading
By Alan Wolper on Posted in District Committees,FINRAMany people, myself included, are of the view that FINRA today remains a self-regulatory organization in name only. For years now, FINRA has taken a series of actions decried by its member firms – new rules, new interpretations of old rules, zealous enforcement of rules, the imposition of punitive sanctions – who correctly complain that… Continue Reading
By Michael Gross on Posted in Churning,Enforcement,FINRAWhen Michael called me to tell me about the subject of this post, I frankly thought he was making it up. The notion that FINRA was seriously suggesting deleting one of the historically recognized essential elements of a churning claim — principally because otherwise it was too difficult for FINRA to prove churning — seemed… Continue Reading
By Alan Wolper on Posted in FINRA,Hiring practices,Rule 1017I don’t know how many times I’ve written about FINRA’s efforts over the years to address “rogue brokers,” or what it refers to nowadays more politically correctly as “high-risk brokers.” It doesn’t really matter what blog post you read, or when I wrote it, as they all tell essentially the same story: FINRA is just… Continue Reading
By Michael Gross on Posted in Board of Governors,FINRAAs loyal readers are undoubtedly already aware, I used to work for NASD, and Michael more recently came to Ulmer from FINRA. That hardly means we win every FINRA Enforcement case we are engaged to defend. To suggest that because we came through the “revolving door,” FINRA does whatever we suggest is, frankly, absurd. I… Continue Reading
By Alan Wolper on Posted in Compliance,Fiduciary Rule,FINRA,Reverse churningA couple of years ago, I blogged about the concept of “reverse churning,” i.e., putting a customer who trades only infrequently into a fee-based account, thus costing the customer a lot more than it would have cost that customer to be in a commission-based account. The reason this became a topic was, at the time,… Continue Reading
By Michael Gross on Posted in Disciplinary Process,Enforcement,FINRAI 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
By Alan Wolper on Posted in Arbitration,FINRA,MAP,PIABAI have often used this forum to complain about FINRA’s lack of backbone when it comes to dealing with PIABA, the group of lawyers who represent customers of broker-dealers, principally in arbitrations. Over the years, FINRA has amended its rules time and again in response to loud claims by PIABA that the arbitration process is… Continue Reading
By Blaine Doyle on Posted in Disciplinary Process,Enforcement,FINRA,OTRI apologize for not posting anything recently, but, sadly, I was embroiled in a two-week arbitration that occupied most of my recent attention. I am home, however, and back in the saddle. In the meantime, here’s a post from Blaine Doyle, author of the classiest post ever in this blog, something about ancient Greece. I… Continue Reading
By Alan Wolper on Posted in Arbitration,Expungement,FINRAExpungement is a funny thing, and here’s why: for years, claimants’ counsel have complained loudly to FINRA that expungement was being granted too frequently, that legitimate customer complaints were disappearing from CRD, resulting in an unfair, sanitized representation of brokers’ records that put unsuspecting customers at risk. As Andrew Stoltmann, PIABA’s president, put it so… Continue Reading
By Alan Wolper on Posted in Arbitration,FINRAI have used this forum before on occasion to complain about the vagaries of the FINRA arbitration process, and, in particular, the perspective of a respondent’s counsel that the game often seems to be rigged in favor of claimants. Let me give you an example that just occurred in the last two days. And let… Continue Reading
By Michael Gross on Posted in Disciplinary Process,Discovery,Examination,FINRA,Rule 8210Here is a really interesting post from Michael regarding those potentially uncomfortable moments when FINRA calls non-complaining customers. Because FINRA is not the government, it has no subpoena power over these people, and so needs them to cooperate voluntarily. The problem is that FINRA does an awful job of informing non-complaining customers that they are… Continue Reading
By Alan Wolper on Posted in Annual Report,Cybersecurity,Disclosure,FINRA,Outside business activitiesI would imagine that the point of FINRA releasing its list of exam priorities each year is to help firms who are actually going to be examined, by providing a glimpse into FINRA’s playbook so they can address, proactively, the issues they know FINRA will focus on. To be forewarned is to be forearmed, right? … Continue Reading
By Alan Wolper on Posted in Compliance,FINRA,Outside business activities,Rule 3270As I have discussed before, there are some rule violations that are going to happen no matter what FINRA says about them, no matter how many Enforcement cases it brings, and no matter what BDs do to “detect and prevent” such violations. A prime example of such is outside business activities, or OBAs. The rule… Continue Reading
By Alan Wolper on Posted in Enforcement,FINRA,Rule 8210Once again, Rule 8210 has me frustrated. And angry. Well, not the rule itself, but the aggressive manner in which FINRA continues to wield it, and how its scope is interpreted by hearing panels called upon to consider cases involving what seem to me, at least, to be troublesome uses of Rule 8210. Let’s start… Continue Reading
By Alan Wolper on Posted in Compliance,Enforcement,FINRA,SupervisionAs promised, FINRA has released its first Report outlining common findings from its examinations, in an effort to help member firms comply with the rules and, presumably, avoid problems that other firms encountered. A noble idea, especially for an entity not exactly known (at least lately) for its proactive measures to assist BDs with their… Continue Reading
By Michael Gross on Posted in Examination,examiners,FINRA,ODAMichael discusses the differences in examiners — and, potentially — examination results from District Office to District Office. Remember, however, that such differences aren’t supposed to exist! That’s why the Office of Disciplinary Affairs exists. I suppose the question is whether the ODA is doing its appointed task of achieving consistency throughout FINRA. – Alan My… Continue Reading
By Alan Wolper on Posted in FINRA,PIABAA week or so ago, I highlighted in a post the acceptance speech of PIABA’s incoming president, Andrew Stoltmann, in which he announced his intent to wage “war” on the securities industry. Bluster aside, Andrew has been true to his word. His opening volley is an attack on the public governors who sit on FINRA’s… Continue Reading
By Michael Gross on Posted in Disciplinary Process,Enforcement,FINRA,SanctionsHere 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
