Wednesday morning marked the confluence of two events. First, like the rest of the world, I awoke to the reality of the results of the presidential race. Then, as soon as I got to the office, I received the results of a case (on which I have previously blogged) that the SEC’s Division of
disciplinary hearings
When It Comes To Churning, FINRA Knows What’s Best For Investors
By UB Greensfelder on
Since I first started practicing law back in the 1980s, customer complaints against brokers have often involved allegations of “churning,” which is deemed to be fraud. Now, as it was 30+ years ago, to prove a churning claim, a customer needs to demonstrate that (1) the broker acted with scienter, which is defined to…
It’s Official: The SEC Has No Sense Of Humor
By UB Greensfelder on
One of my colleagues and I were busy the last two week defending an SEC administrative proceeding out-of-town, so I have not had much chance to blog. But…there was one development during our hearing that merits some immediate attention.
My client has been accused, essentially, of making a number of material misrepresentations and omissions in…
The Math of Mark-Ups/Downs
By UB Greensfelder on
I am pleased to welcome a new author to Broker-Dealer Law Corner, my partner in Ulmer’s Boca Raton office, Michael Gross. Like myself, Michael returned to private practice after a stint at FINRA, specifically, with the Department of Enforcement, where he handled big, litigated cases all over the US. There is no substitute for the…
Advertising Case Loss Reveals Limits To FINRA’s Jurisdiction Over Outside Business Activities
By UB Greensfelder on
It is a simple fact that a broker-dealer has no obligation to supervise a disclosed outside business activity. How do I know? FINRA has said so. This, for instance, comes straight from Reg Notice 05-50: “Rule 3030 does not require that the firm supervise or even approve an outside business activity, although a…
Procedural Motions In FINRA Enforcement Actions: An Exercise In Futility
By UB Greensfelder on
Defending a FINRA Enforcement action is not easy. This stems principally from the fact that FINRA simply won’t file a complaint in the first place if they believe that there’s any realistic chance they will not win the case. Thus, they expect to win every time they do file a complaint, and perhaps not unreasonably…
According To FINRA, “Culture Of Compliance” Is Not Only Definable, It’s Enforceable
By UB Greensfelder on
Earlier this year, as part of its 2016 Examination Priorities, FINRA spent a lot time discussing the “culture of compliance” at broker-dealers, the notion that firms need to create an atmosphere where compliance with rules and regulations is more than just lip service, but, rather, where it is a priority established by firm management –…
Good Grief! MetLife Agrees To $20 Million Fine, And Another $5 Million In Restitution! For Negligence!
By UB Greensfelder on
FINRA announced today that it entered into a settlement with MetLife Securities, Inc. in which MetLife agreed to pay FINRA a $20 million fine and its customers up to $5 million in compensation for, basically, making misrepresentations over a five-year period to customers who replaced one variable annuity with another regarding the costs of making…
What In The Wells Is Going On With FINRA’s “Wells” Process?
By UB Greensfelder on
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…
(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…