Not too long ago, I blogged a couple of times about the amount of attention that is suddenly being paid to the number of registered representatives with disciplinary histories working for FINRA member firms, i.e., the so-called recidivists (who used to be called “rogue reps”). Among the complaints I voiced was the fact that while
Swing And A Miss: A Rare Form U-4 Loss For FINRA
I have blogged multiple times, as recently as a couple of weeks ago, about the slew of Enforcement actions that FINRA has brought for an RR’s failure to update his or her Form U-4 in a timely manner to disclose a tax lien. My partner, Michael Gross, examines one such case that FINRA managed to
The Devil Is In The Details When It Comes To Enforcing Arbitration Agreements With Registered Reps
It should be abundantly clear to everyone that BDs are required to arbitrate disputes with their registered reps. There are several reasons I can assert this with such a great deal of certainty. First, and most obvious, there is a rule about it. Rule 13200(a) of the Code of Arbitration Procedure provides that
[e]xcept as
Correlation DOES NOT Equal Causation: PIABA’s Ongoing Quest to Sully the Reputation of Financial Advisors
Today, the Public Investors Arbitration Bar Association (PIABA) published another hit piece on the expungement process. For those of you interested, you can find it HERE. Again and again, PIABA issues press releases and reports contending that the expungement process is broken because expungement is granted at an “alarmingly high rate.” Let’s start with
FINRA’s (Mostly) New Background Check Rule Goes Into Effect July 1
As everyone who studies FINRA’s Regulatory Notices is already well aware, two days from now, FINRA’s rule requiring background checks on prospective registered representatives goes into effect. A lot of what the new rule mandates is not new, but, as there are some things that clearly were not required before, it is worth taking a
U-4 Omissions and Statutory Disqualification: Much Ado About Nothing
I have discussed in prior blogs some issues with the process of registering individuals, and ensuring that information on U-4 is complete and accurate. To some degree, the debate is a bit silly, if the question is whether there is enough information provided on BrokerCheck.
There is a real problem, however, one that is much
Problems with Registration of Registered Reps, Part 1: Does Anyone Actually use BrokerCheck?
I read with great interest the recent flurry of articles in the financial news, including one appearing on the front page of the Wall Street Journal, about the supposed flaws with FINRA’s BrokerCheck due to the fact that it omits from public view some items, e.g., certain misdemeanor convictions and financial issues (unsatisfied liens
FINRA’s Hiring Requirements Under Rule 3110: Don’t Trust and Verify
FINRA Rule 3110 is the new supervision rule, of course, replacing old NASD Rule 3010. Most of it became effective on December 1, 2014, but, certain parts will only become effective on July 1, 2015. One of the latter sections is 3110(e), which addresses a firm’s obligation to investigate anyone being considered for registration, and