As 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
Search Results for:
Reverse-Churning: BDs Are Damned If They Do, And Damned If They Don’t
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
FINRA’s Stated Paradigm Shift On Enforcement Actions
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
Do FINRA’s Proposed MAP Rules Put PIABA’s Concern Over Money Ahead Of Fairness To Members?
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
What Not To Wear (Or Do) At Your FINRA OTR
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
Expungement: Already An “Extraordinary Measure,” FINRA Now Seeks To Make It Even Less Accessible
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
A Sordid Story From The Trenches Of FINRA Arbitration
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
Help! FINRA Is Calling My Customers
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
FINRA’S 2018 Exam Priorities Reflect Business As Usual
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
Can FINRA Deliver On A Promise To Provide Meaningful Relief To Compliance Departments?
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
Will FINRA’s 8210 Madness Ever Stop?
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
FINRA’s Exam Guidance Is A Big Yawn
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
FINRA Examiners Are Like A Box Of Chocolates . . .
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
First Shot Fired In PIABA’s War On The Securities Industry
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
No Bar For Submitting False Expense Reports?
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
PIABA’s New President Is A Nice Guy, Sure, But He’s Hardly Your Friend
Posted in Arbitration, FINRA, PIABAI have stated more than once in these posts that among claimants’ counsel, I have perhaps the greatest respect for Andrew Stoltmann, a fellow Chicagoan. I am not saying that I ever agree with anything he has to say, because I don’t, but he is a gentleman, he acts ethically, he is fun to listen… Continue Reading
FINRA In The News, And Not In A Good Way
Posted in FINRAIt has been said that there’s no such thing as bad publicity, but I wonder if FINRA feels that way after having been featured in a number of less-than-favorable, or at least curious, media stories over the last couple of weeks. First, two weeks ago, Bruce Kelly of Investment News ran a story with this headline: … Continue Reading
This Case Could Mean An End To Bars And Suspensions…Maybe
Posted in Disciplinary Process, Enforcement, FINRA, Sanctions, SECBear with me here as I relate the tale of John Saad and his tortuous path through the FINRA Enforcement process and, ultimately, the court system. It is worth following me on this journey, as the upshot of the story is that FINRA, which is so quick to want to bar every respondent it sees,… Continue Reading
FINRA’s Heavy Hand Questioned…By FINRA
Posted in Defenses, Disciplinary Process, Enforcement, FINRA, Rule 2010I am on the record, many times, with my belief that, at least in theory, FINRA should never lose any Enforcement cases it files. This is for the simple reason that if FINRA has any genuine doubts about its ability to prevail in front of a hearing panel, due to the quality of the evidence… Continue Reading
The Equifax Breach May Be A Problem For More Than Just Equifax
Posted in Confidential customer information, Cybersecurity, FINRAAll of you who use Equifax to conduct a part of your CIP responsibilities, raise your hands. Ok, now, only to those of you whose hands are in the air: how many of you have checked your firm’s incident response plan to determine the steps that need to be taken in the event of a… Continue Reading
What Is FINRA’s Job?
Posted in Compliance, FINRAA client of mine bought a BD, thereby requiring him to go through the CMA process. It was a very small firm, with fewer than ten registered reps. He was a newly minted 24, so he had other, more experienced principals on board to handle all supervisory responsibilities. His job, as outlined in the firm’s… Continue Reading
Has FINRA Completed Its Inquiry?
Posted in Arbitration, Disciplinary Process, FINRAHere is a very interesting post from Michael Gross about what happens at the end of a FINRA exam. One point that he omitted, but worth mentioning, is that in the event FINRA does issue a close-out letter stating that its exam is done and no disciplinary action will be taken, that letter cannot be… Continue Reading
Ransomware In 2017: Not A Pretty Picture
Posted in Cybersecurity, FINRA, SECI am happy to share this post from my colleague, Greg Stein, about ransomware. While ransomware is not something unique to the financial services industry, because, as criminal Willie Sutton famously answered when asked why he robbed banks, our industry is “where the money is,” BDs, IAs and banks do seem to attract more than their fair… Continue Reading
The Head-In-The-Sand Approach To Supervision: A Primer
Posted in CCO, Defenses, Disciplinary Process, Enforcement, FINRA, SupervisionThere’s a claimant’s lawyer I’ve litigated against several times who is very good at his job, and who I personally like very much. Part of the reason for his success is that he is very engaging, so even when he utterly lacks any decent facts on which to base his claim – which is often… Continue Reading
.