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
SEC
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…
SEC Settlement Is A Wake-Up Call To Review Outdated Procedures
By Alan Wolper on
Most securities regulations, by design, create a gray world where compliance is not crystal-clear, but, rather, subject to interpretation. After all, what you think constitutes “reasonable” supervision and what FINRA or the SEC think is reasonable may very well be two extremely different things. Indeed, it is the existence of subjective standards of conduct like…
Are We Looking At The End Of Mandatory Arbitration? That’d Be OK With Me
By Alan Wolper on
Posted in Arbitration, FINRA
As everyone knows, back in the 1980s, broker-dealers fought hard for the ability to include in a customer agreement a clause mandating that all disputes be dealt with in the arbitration forum, rather than in court. It was not an easy fight, as to require a customer to arbitrate means that certain rights that would…
SEC Not Only Reverses FINRA Disciplinary Action, But Provides Blueprint For Respondents To Use In Their Defense Of Similar Claims
By Alan Wolper on
My friend and former colleague, Brian Rubin, publishes annually his analysis of FINRA Enforcement cases, spotting trends in terms of the number and types of matters it brings, the sanctions meted out, etc. It is an excellent tool, and eagerly anticipated by lots of us who practice in this industry. One of the hard parts…
SEC 2021 Exam Priorities
By Heidi VonderHeide on
Thanks to Heidi for today’s post. – Alan
Today, the SEC put out its 2021 Exam Priorities, available here. It is about 40 pages long and covers a lot of topics. While I encourage everyone to read through the document, here are the primary focus items for 2021:
Overarching Themes / Focal Points:
- Regulation
…
The SEC’s New Marketing Rule: Bringing Investment Adviser Advertising From The “Mad Men” Era To The Amazon Age
By Alan Wolper on
Posted in Advertising, SEC
Happy Holidays, everyone! Since you’re all just sitting home with plenty of time on your hands, it is the perfect opportunity to enjoy this post from my colleague Denise Fesdjian, about the SEC’s new marketing rule for RIAs. – Alan
“The SEC score(s) one for the digital age.” These are the words of SEC Commissioner…
Let’s Hear It For CCOs; After All, They Are Human People
By Alan Wolper on
We have frequently blogged here about the degree of attention that regulators pay to Chief Compliance Officers, and whether it is proper that they sometimes are named individually in Enforcement actions. And we are hardly the only ones who see this issue. The New York City Bar back in February – I know, that seems…
SEC’s Reg BI Roundtable Round-up
By Heidi VonderHeide on
On October 26, the SEC hosted a roundtable discussion during which the SEC and FINRA shared some of their observations about how firms are doing implementing Regulation Best Interest. If you missed the live presentation, it was recorded and is available here.
The discussion covered a lot of topics and, in some instances, simply…
The Trouble With Texts
By Alan Wolper on
Having completed my Enforcement hearing conducted by Zoom – more about that in an upcoming post – I can finally turn my attention back to some matters that arose while I was busy.
One that stood out for the sheer (and frightening) universality of its lesson is an SEC settlement entered into by Jonestrading Institutional…