By Alan Wolper on Posted in SEC,SupervisionI have been busy the last month getting ready for a big arbitration, and attending the first week of what looks like is going to be a four- or five-week slog when all is said and done. So, I am just catching up on some recent developments, and mulling over what might be of interest… Continue Reading
By Alan Wolper on Posted in Disciplinary Process,FINRA,High-Risk firmsIf you are a regular reader of this blog, then you know that over my last few posts, I have been talking about an increasingly visible effort by FINRA to turn its regulatory eye from rogue brokers – who have been an irritant to FINRA and NASD for decades – to rogue firms (my term,… Continue Reading
By Alan Wolper on Posted in FINRA,heightened supervision,High-Risk firms,Rogue repI 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
By Ken Berg on Posted in Administrative Proceedings,NCLA,SECMy partner, Ken Berg, writes about his recent meeting with the NCLA, a group that anyone who has an administrative practice should be familiar with. – Alan I had the privilege of being invited to attend in Washington, D.C., on February 28, 2019, the inaugural panel discussion hosted by a relatively new nonprofit civil rights… Continue Reading
By Alan Wolper on Posted in FINRA,Rogue rep,Rule 3170,Taping RuleYesterday, FINRA sent a seemingly innocuous memo to member firms giving a brief outline of the subjects that its Board will take up at its meeting this week in sunny Boca Raton, Florida. (Wait, the Board isn’t meeting in Washington, as it normally does, but, rather, in south Florida? Oh, right, it’s February. Much better… Continue Reading
By Alan Wolper on Posted in Cybersecurity,FINRAYesterday, two of my colleagues here at Ulmer, Fran Goins and Michael Hoenig, published an article in @BLaw Insight in response to a recent report by FINRA outlining the best practices for BDs to deal with cyber threats. Since this is undoubtedly a subject of considerable interest to many of you, I wanted to share it right… Continue Reading
By Alan Wolper on Posted in FINRA,Rule 8210I have been waiting for a while to write about this issue, since it arose in an Enforcement case I handled for a client, and I wanted the matter to run its full course at FINRA before I started throwing stones. Sadly, there are so many things I could complain about here. The fact that… Continue Reading
By Michael Gross on Posted in Arbitration,FINRADoes 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
By Alan Wolper on Posted in FINRA,Rule 2165,Rule 4512,Senior InvestorsThe 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
By Alan Wolper on Posted in 529 Plan,FINRAAbout 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
By Alan Wolper on Posted in Compliance,Examination,FINRA,Rogue repIn 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
By Michael Gross on Posted in FINRA,Outside business activities,Rule 3270It 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
By Alan Wolper on Posted in Arbitration,FINRA,PIABAWhat 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
By Alan Wolper on Posted in Enforcement,Examination,FINRAOn 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
By Alan Wolper on Posted in Disciplinary Process,Enforcement,FINRA,SanctionsLast 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
By Alan Wolper on Posted in Examination,FINRAAs I am (probably too) fond of reminding people, I was an English major, and pride myself, at least to some degree, on my ability to use words effectively to communicate clearly. I get easily frustrated, therefore, when I read or hear something that was purportedly designed to relate a specific message, but the message… Continue Reading
By Blaine Doyle on Posted in CFTC,Compliance,Crypto,Cybersecurity,FINRA,SECI recently had to the opportunity to sit in on a talk from high ranking CFTC and SEC enforcement officials at a local bar association meeting. The purpose of the get together was, in part, to let industry folks and their lawyers know what the regulators will be focusing on in the near future in… Continue Reading
By Alan Wolper on Posted in SEC,SupervisionA little over a year ago, I blogged about a FINRA Enforcement action against an Ameriprise rep – but, notably, not Ameriprise – to highlight what a great job the firm did in ensuring that its sales force was not engaging in any undisclosed outside business activities. It had a robust supervisory procedure, with multiple… Continue Reading
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 AML,SAR,SECThis week, Charles Schwab consented to pay the SEC a $2.8 million civil penalty for failing to file SARs on certain transactions – suspicious transactions, namely – by a number of independent investment advisors that Schwab had terminated from its platform. This matter is noteworthy not just for the size of the civil penalty, but because… 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
