Well hello again, and Happy Valentine’s Day! Sorry for the long hiatus, but glad to be back with this piece from Nathan, who is too modest to call himself Mr. Crypto…but if the shoe fits…. Not saying I always understand what he says, but it’s nice to have him as an incredible resource for this
SEC
The High Price Of Fighting – And Beating – The SEC Can Make Settling An Acceptable Solution
By Alan Wolper on
When I am engaged to defend a case, whether it’s a customer arbitration or a regulatory complaint, my clients typically get to the point, sooner or later, where they ask me two questions: (1) what do I think about their chances of winning, and (2) what’s it gonna cost me. In many matters, the answer…
Time Never Matters To Regulators, Until It Does
By Alan Wolper on
As the song goes, time keeps on slipping, slipping, slipping into the future. While Steve Miller may not have had FINRA and the SEC in mind when he wrote that lyric, the shoe certainly fits. Because here’s the thing about the passage of time, at least in FINRA/SEC world: typically, regulators pay it little attention. …
Determining Chief Compliance Officer Liability Isn’t Really That Confounding
By Alan Wolper on
About a month ago, the SEC announced a settlement in a modest little case that has, nevertheless, managed to garner a lot of attention. This is a result of the fact that one of the respondents was the CCO, i.e., the Chief Compliance Officer, of the co-respondent RIA. Determining the particular circumstances under which CCOs…
Equitable’s Settlement With The SEC Demonstrates That A Single Customer Complaint Can Serve As Notice Of A Systemic Issue
By Alan Wolper on
Last week I posted a blog about the dangers of not heeding findings made during a regulatory exam, at least findings of clear, undisputable compliance issues that cannot be meaningfully defended. Today I am writing to highlight a corollary rule: if one customer points out the existence of a real problem, again, a clear problem…
The Very Pricey Real Estate At The Intersection Of The Old Books-And-Records Rule And The New Reality Of How People Communicate
By Alan Wolper on
Happy New Year! I hope you had an enjoyable holiday season. At least happier than that of JP Morgan Securities, which, right before Christmas, got to write checks to the SEC and the CFTC totaling $200 million. That’s a lot, even for JPMS. How did this happen?
Well, the story starts with a very old,…
SEC Settlement Proves That It’s Easy Enough For An IA To Get In Trouble Just For Doing Nothing
By Alan Wolper on
My job frequently requires that I explain to someone – whether my client, an ALJ, an arbitration panel, even a regulator – the fundamental difference between a broker-dealer and an investment advisor. An IA operates pursuant to a fiduciary duty; a BD, on the other hand, even with the advent of Regulation BI, largely has…
Passing The Suitability Buck To The Customer Is Never A Good Strategy
By Alan Wolper on
I continue to wade my way through a few months’ worth of cases, press releases, etc., looking for things that manage to catch my attention. I found this SEC settlement from the end of July involving Integral Financial, a BD out of California, and its founder, majority owner, President, and Chairman of the Board of…
Securities America SEC Settlement Raises Prospect Of New Supervisory Standard
By Alan Wolper on
There have been tons of cases where firms got in trouble – in AML trouble, which is one the worst kinds of trouble – for failing to be sufficiently on top of third-party wires, i.e., where a customer wires money not to himself but to someone else. In a change of pace, last week, the…
SEC Settlement Is A Wake-Up Call To Review Outdated Procedures
By Alan Wolper on
Most securities regulations, by design, create a gray world where compliance is not crystal-clear, but, rather, subject to interpretation. After all, what you think constitutes “reasonable” supervision and what FINRA or the SEC think is reasonable may very well be two extremely different things. Indeed, it is the existence of subjective standards of conduct like…