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 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 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
By Alan Wolper on 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
By Alan Wolper on 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
By Alan Wolper on 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
By Michael Gross on 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
By Alan Wolper on 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
By Alan Wolper on Posted in Disciplinary Process,FINRA,ODABack in the old days, back when it was still NASD and it bore some reasonable semblance of a true self-regulatory organization, the important decisions relating to the Enforcement process – the decision to issue a complaint, the decision to settle a case, and the decision in litigated matters that actually went to hearing –… Continue Reading
By Michael Gross on Posted in Disciplinary Process,Enforcement,FINRA,Rule 8210My dissatisfaction with FINRA’s Rule 8210 and, more specifically, the aggressive manner with which FINRA wields that rule, has been the subject of several prior blogs. I happy to report that my partner, Michael Gross, has drunk the Kool-Aid, and joined me in tilting at this windmill. – Alan The first paragraph of a paper calling… Continue Reading
By Alan Wolper on Posted in Discovery,Enforcement,FINRA,Rule 8210,Rule 9251,UncategorizedLet’s play pretend. Can you imagine what FINRA would do to a respondent broker-dealer in an Enforcement action that announced on Day Five of the hearing – i.e., during the “final phase” of the hearing – that – whoops! – it had forgotten to produce certain documents that it should have produced eight months before… Continue Reading
By Alan Wolper on Posted in Disciplinary Process,Disclosure,Enforcement,FINRA,Outside business activitiesOutside business activities are in the news. In Reg Notice 17-20, FINRA announced that it was seeking comments in an effort to learn whether or not the existing rules governing OBAs are effective. (The comment period is open until late June, so if you have strong feelings on the subject, now is the time to… Continue Reading
By Alan Wolper on Posted in AML,Compliance,EnforcementMany of my clients chafe at the AML rule, given the cost of compliance and the even higher cost of defending an Enforcement action if the regulators conclude that red flags were somehow missed, or spotted but not dealt with adequately, or soon enough, or both, or spotting the red flags, responding to them, but… Continue Reading
By Alan Wolper on Posted in Disciplinary Process,Enforcement,FINRA,Reg Notice 08-70,Sanctions,SettlementsI read a fascinating piece the other day in BankInvestmentConsultant about FINRA’s Enforcement program, specifically about the notion of broker-dealers self-reporting problems, and whether that was a smart thing to do. Some of the quotes attributed to FINRA senior Enforcement management are really interesting, so I wanted to share them with you in the event… Continue Reading
By Alan Wolper on Posted in Enforcement,FINRA,Registered Representative,Rule 2010,SanctionsI have been meaning to write something about this recent NAC decision for a while now, but I am still not really sure what to make of it. I suppose it stands for two propositions. First, there is almost nothing that a registered rep can do without FINRA sticking its nose in, regardless of whether… Continue Reading
By Alan Wolper on Posted in Disciplinary Process,Enforcement,FINRA,SupervisionI have often used these posts to lament the fact that FINRA consistently acts as an enforcement driven group of crazed examiners, hell-bent on writing firms up for technical violations, at best, uncaring about the dramatic ramifications of their seemingly ceaseless attack on well-meaning broker-dealers and their owners. While I still harbor those feelings, occasionally… Continue Reading
By Alan Wolper on Posted in Disciplinary Process,Enforcement,Examination,FINRA,SECAt the beginning of most FINRA OTRs, the examiner reads from a script of sorts, outlining some of the basic rules governing the proceeding. One of the things the script calls for is an express acknowledgement by the witness that he or she is testifying pursuant to Rule 8210, and that, as a result, a… Continue Reading
By Alan Wolper on Posted in Defenses,Disciplinary Process,Enforcement,FINRA,Sanctions,SupervisionRemember a few weeks ago? Remember I blogged about Robert Cook, FINRA’s new CEO? And how he was saying all the right things about FINRA perhaps being juuuuust a bit too Enforcement oriented? I expressed hope – sincere but wary hope – that given his remarks, it was possible that the pendulum might actually start… Continue Reading
By Michael Gross on Posted in Disciplinary Process,Enforcement,FINRA,SanctionsAs a former member of FINRA Enforcement’s Litigation Department and a current practitioner in FINRA regulatory matters, I have read my fair share of decisions from the Office of Hearing Officers (OHO). I recently read the Southeast Investments/Black decision, which was issued in March. There is some good stuff in there – from an entertainment… Continue Reading
By Alan Wolper on Posted in CCO liability,Disciplinary Process,Enforcement,FINRA,Rule 3010There has been a lot of discussion over the past few years, including in this blog, about the growing – and troubling – trend for Chief Compliance Officers to be named as respondents in disciplinary actions. While regulators regularly deny that they truly have it out for CCOs, as is often the case, their actions… Continue Reading
By Michael Gross on Posted in Disciplinary Process,Enforcement,Examination,FINRA,OTRLast week, I published a post about the benefits of “lawyering up” when dealing with FINRA, particularly to handle the defense of an OTR. Here, my partner Michael Gross, who, like me, is a former FINRA Enforcement attorney, offers his advice about how properly to prepare for an OTR. While this post is helpful, it… Continue Reading
