While it is pretty likely that anyone reading this is already familiar with the Wells process, I am going to start with a short history lesson.
Way back in 1972, the SEC created an Advisory Committee to take an objective look at how the SEC was conducting its enforcement program. John Wells was the guy…
I have watched enough medical shows over the years, from the awesome St. Elsewhere to the never-ending Grey’s Anatomy, to have heard umpteen times that the Hippocratic Oath includes the admonition that doctors “do no harm.” While, apparently (according to Google, anyway), Hippocrates may or may not have ever actually said that, everyone gets the…
When I am engaged to defend a case, whether it’s a customer arbitration or a regulatory complaint, my clients typically get to the point, sooner or later, where they ask me two questions: (1) what do I think about their chances of winning, and (2) what’s it gonna cost me. In many matters, the answer…
So, after all the hubbub about how Reg BI was going to turn the brokerage industry on its head, given the new standard of conduct – more like that of a fiduciary – that it was imposing on BDs and registered reps, I’m sure everyone was as super excited as I was the week before…
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. …
It’s always exciting to watch something that you just know will be deemed by later generations to be an historic event. I mean, I distinctly remember watching Neil Armstrong on TV taking his first steps on the moon, or the tragic Challenger disaster, or OJ demonstrating how the glove just didn’t fit, and thinking: this…
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…
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…
There is no question in my mind that the quality of FINRA examiners is a bit uneven. Some are smart and insightful and helpful; others are, well, not. Most of the time, they do know what they’re talking about. That means the opportunity to make legitimate arguments against exam findings can, at least sometimes, be…
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…
