By Alan Wolper on Posted in SEC,SupervisionI have been busy the last month getting ready for a big arbitration, and attending the first week of what looks like is going to be a four- or five-week slog when all is said and done. So, I am just catching up on some recent developments, and mulling over what might be of interest… Continue Reading
By Alan Wolper on Posted in SEC,SupervisionA little over a year ago, I blogged about a FINRA Enforcement action against an Ameriprise rep – but, notably, not Ameriprise – to highlight what a great job the firm did in ensuring that its sales force was not engaging in any undisclosed outside business activities. It had a robust supervisory procedure, with multiple… Continue Reading
By Alan Wolper on Posted in Compliance,FINRA,FintechI read recently that in the not-too-distant future, the practice of law by actual human beings will become a rarity, as computers will take over those jobs, because they will be able to do the work better, cheaper and faster. Speaking as a lawyer, I find that to be a somewhat troubling prospect. I mean,… 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 Michael Gross on Posted in Compliance,FINRA,Rule 2165,Senior InvestorsA few weeks ago, I posted a blog about FINRA’s new rule concerning senior investors. My take was largely that the rule made sense, but only to the extent that it provides protections for BDs that encounter the need to share otherwise confidential information about a customer due to concerns about the customer’s health, particularly… 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 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 Alan Wolper on Posted in annuities,Compliance,SupervisionBack in December, the State of Massachusetts filed a Complaint against LPL and one of its big producers alleging that the producer, Roger Zullo, defrauded his clients and lied to his supervisors in connection with the sale of variable annuities. What struck me when I read the Complaint, and what has still stuck with me,… Continue Reading
By Alan Wolper on Posted in AML,Compliance,Disciplinary Process,Enforcement,FINRA,SEC,SupervisionIf you’re reading this, then you undoubtedly already know that FINRA and SEC are, simply, AML crazy. Rightly or wrongly, they are both focusing more than ever on broker-dealers’ fulfillment of their supervisory obligation to be sensitive to the laundry list of red flags first articulated in a Notice to Members back in 2002 that… Continue Reading
By Alan Wolper on Posted in Compliance,Culture,Disciplinary Process,Enforcement,FINRA,SupervisionEarlier 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 –… Continue Reading
By Alan Wolper on Posted in annuities,Disciplinary Process,Enforcement,FINRA,Suitability,SupervisionFINRA 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… Continue Reading
By Alan Wolper on Posted in Compliance,Conflict of Interest,Examination,FINRA,SupervisionI posted several blogs this summer about our victory over the SEC in the Robare case (which, naturally, has been appealed by the SEC’s unhappy Division of Enforcement). One of the key elements in our ability to prevail in that matter was my client’s extensive use of outside securities consultants to assist in the preparation and… Continue Reading
By Alan Wolper on Posted in Disciplinary Process,Enforcement,Sanctions,Settlements,SupervisionI read with interest the press release FINRA issued this week announcing an $11.7 million settlement with LPL, principally over what FINRA characterized as “widespread supervisory failures.” There were two things most noteworthy to me.[1] The first, interestingly, is not the size of the monetary sanctions (a $10 million fine plus $1.7 million in restitution),… Continue Reading
By Alan Wolper on Posted in FINRA,Form U-4,Rule 3110FINRA 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… Continue Reading
