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.
disciplinary action
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…
When It Comes To GPB, FINRA Looks At Things Quite Differently Than The SEC And The DOJ
By Alan Wolper on
Among the criticisms I have leveled against FINRA are (1) that it is increasingly acting like a claimant’s arbitration attorney, by taking every possible opportunity to blame member firms for losses incurred by investors when other palpable reasons for those losses exist, and (2) that it loves, well after the fact, to jump in on…
FINRA Continues To Turn Its Back On Its Members By Failing To Pass A Popular Rule
By Alan Wolper on
There are certain topics that broker-dealers have been encountering for decades, yet continue unnecessarily to wrestle with due to the absence of clear guidance from the regulators. I have written about one such topic before, and that’s the fuzzy line between most outside business activities, which RRs are obliged (at a minimum) by rule to…
A Sad Story Of Regulators Simultaneously Doing Too Much And Too Little
By Alan Wolper on
Not too long ago, a single, small BD experienced a bizarre combination of regulatory overzealousness and regulatory indifference, by the SEC and FINRA, respectively. These things, sadly, happen all the time, but what happened to this unfortunate firm presents an excellent case study in regulators who simply do not wield their considerable prosecutorial discretion in…
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…
For FINRA, Unlike The SEC, Blaming The BD Always Seems To Be The Answer
By Alan Wolper on
FINRA Enforcement has often been accused (again, admittedly, by me, and not too infrequently) of going after the “low-hanging fruit,” that is, taking the easy case when it presents itself. Putting aside the question whether this observation is accurate or not – for what it’s worth, I think the answer is that it is often,…
You Should Understand The Difference Between Violating A Firm Policy And Violating A FINRA Rule . . . Even If FINRA Doesn’t
By Alan Wolper on
I am writing this while flying home from my first business trip in over 15 months. I have to tell you, it is more than a bit of a strange feeling to be out and among people again. While my face is sore from wearing this N95 mask nearly non-stop for three days, my hands…
If You Supervise Yourself — Which You Cannot Do — Make Sure You Do It Right
By Alan Wolper on
I have always operated with the understanding that, per FINRA rules, one cannot supervise him- or herself. Hardly an outrageous proposition. Today, however, that fundamental, bedrock understanding was so shaken, it has left me wondering whether anything is what it seems (especially when coupled with Loyola’s win this weekend over Illinois, which, really, can only…