With any luck, you can go your entire career in the securities industry without ever participating in the dreaded “Wells process.” And that’s a good thing, as the Wells process occurs only after FINRA has completed an examination and has concluded that whatever it has encountered is so serious that a formal disciplinary action is
broker-dealers
(Another) Landslide Victory: FINRA Enforcement Offers ZERO Evidence Of Fraud
By Chris Seps on
At the end of last week, we received our second[1] decisive win in a FINRA Enforcement case in a matter of days. Following a two-day hearing back in July, the hearing Panel dismissed all charges against our clients Paul J. McIntyre and MSC-BD, LLC. While any victory is nice, and doing justice for a…
NASAA’s Model Fee Disclosure Template: Welcome, Regulators, To My World, Where Customers Read Nothing, But Without Consequences
By UB Greensfelder on
Yesterday, NASAA released a Model Fee Disclosure Template for broker-dealers, urging firms voluntarily to adopt the model as a means of clearly disclosing to customers and prospective customers the types and amounts of various miscellaneous fees that BDs ordinarily charge their customers. Working with FINRA, SIFMA, the FSI, LPL Financial LLC, Morgan Stanley Smith Barney…
FINRA’s New Debt Research Report Rule, Or, In Other Words, When The Concept Of Managing “Conflicts Of Interest” Became Reality
By UB Greensfelder on
Much like some people (well, me, anyway) enjoy debating what was the first “punk rock” song to go mainstream (Pump It Up, by Elvis Costello, of course), others more erudite than I prefer, instead, to argue about what it was that initially propelled FINRA down its current Enforcement oriented path. To me, the answer has…
The Ongoing Puzzle Of Ongoing Due Diligence
By UB Greensfelder on
I am currently in the midst of a FINRA examination that is largely focused on the adequacy of the due diligence that my broker-dealer client conducted of a private placement. What is puzzling about the exam is that FINRA is not just interested in the due diligence that was conducted prior to effecting any sales…
Double Jeopardy: I’ll Take “Fundamental Unfairness” for $200, Alex
By UB Greensfelder on
I have written before about some of FINRA’s procedural processes that seem strange and unfair. For instance, the constitutionally guaranteed Fifth Amendment right against self-incrimination? Doesn’t exist in FINRA world. Try invoking the Fifth at a FINRA OTR rather than answering a question and you will be facing a permanent bar for violating Rule 8210.…
FINRA Discovery Guide’s Misguidance: Part 2
By Chris Seps on
I’ve previously posted about my frustration with the way the discovery guide is written, with particular attention focused on List 1 Item 10. See my prior post here. Item 14 causes me similar angst. Why? Because Item 14 is so poorly worded that, if read literally, almost no audit report will ever be responsive…
FINRA Board Election: A Real Choice For a Change in the Mid-Size Firm Board Seat
By UB Greensfelder on
I have told many people over the years that the only way to effect true change at FINRA must come from the inside. I can write blog posts every day pointing out what I perceive to be the occasional error of FINRA’s ways, but apart from the cathartic effect it provides me to vent, the…
If You’re a Respondent, Time is NOT on Your Side
By UB Greensfelder on
Posted in Arbitration, Defenses, Disciplinary Process, Enforcement, FINRA, Registered Representative, SEC
There was a decision this week from the D.C. Circuit Court of Appeals on an appeal of a decision by a respondent who – stop the presses! – lost an SEC administrative proceeding, and then lost his appeal to the SEC. Montford and Company, Inc. v. SEC, No. 14-1126 (July 10, 2015). One of…
Actions Speak Louder Than Words: The Regulation of Chief Compliance Officer (CCO) Conduct
By UB Greensfelder on
Yesterday, the SEC held its 2015 “National Compliance Outreach Program for Broker-Dealers.” The program was designed to “provide[] an open forum for regulators and industry professionals to share strong compliance practices and promote the exchange of ideas to develop an effective compliance structure.” In the spirit of this cooperation, SEC Chairwoman White opened the conference…