By Alan Wolper on Posted in Enforcement,FINRA,Rule 8210,UncategorizedIf you’ve read this blog for even a short while, you know my feelings on Rule 8210, or, more specifically, how FINRA uses that rule, i.e., as a cudgel to keep member firms and their associated persons in line. Endless 8210 requests for documents and information, sometimes asking multiple times for the same stuff, each… Continue Reading
By Alan Wolper on Posted in Disciplinary Process,Enforcement,FINRA,SanctionsLast year I wrote about FINRA’s effort to encourage firms to self-report their problems, pausing to wonder at the suggestion attributed to Jessica Hopper, a Senior Vice President with Enforcement, that cooperating with FINRA by self-reporting “not only fulfills a firm’s regulatory responsibilities, but it can also mean the difference between a slap on the… Continue Reading
By Alan Wolper on Posted in Arbitration,FINRA,PIABAI just read an article about a research study conducted of FINRA arbitrations by three people associated with Harvard, Stanford, and the University of Texas, respectively, and their overarching conclusion is a doozy. Now, admittedly, I have not read the study itself (as it costs $5 to get a copy), so I only know what… Continue Reading
By Alan Wolper on Posted in Examination,FINRAAs I am (probably too) fond of reminding people, I was an English major, and pride myself, at least to some degree, on my ability to use words effectively to communicate clearly. I get easily frustrated, therefore, when I read or hear something that was purportedly designed to relate a specific message, but the message… 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 FINRAIf you are like me, and spend your idle time twiddling around the FINRA website, then you already know that FINRA publishes a variety of mathematical statistics, updated periodically, that provide, along with the sobering tally of the Enforcement actions brought and fines imposed, a good insight into the composition of the membership. Yesterday, FINRA… Continue Reading
By Alan Wolper on Posted in Arbitration,FINRAOnce upon a time, FINRA at least pretended that it was interested in maintaining a level playing field for claimants and respondents in the arbitrations it administers. Today, all that pretense has been jettisoned. In Regulatory Notice 18-22, which seeks comments on FINRA’s proposal to require respondents to produce information relating to their insurance policies,… Continue Reading
By Alan Wolper on Posted in Enforcement,FINRA,Outside business activities,Rule 3270,UncategorizedIn most Enforcement cases involving outside business activities, it is the registered rep who is named as the respondent, and the allegation is that the RR failed to provide notice (or timely notice) to his or her broker-dealer about the OBA. On occasion, however, it is the BD that gets tripped up, typically for not… Continue Reading
By Alan Wolper on Posted in Disciplinary Process,Enforcement,FINRA,Sanctions,UncategorizedYou are not going to believe this one. Here are the unadulterated facts, taken directly from the Order entered by the FINRA Hearing Officer (an Order, by the way, which FINRA elected not to publish on its website): Five days into an Enforcement hearing against Respondent Steven Larson, “Enforcement disclosed that it just realized it… Continue Reading
By Alan Wolper on Posted in AML,SAR,SECThis week, Charles Schwab consented to pay the SEC a $2.8 million civil penalty for failing to file SARs on certain transactions – suspicious transactions, namely – by a number of independent investment advisors that Schwab had terminated from its platform. This matter is noteworthy not just for the size of the civil penalty, but because… Continue Reading
By Alan Wolper on Posted in Arbitration,FINRA,PIABAAbout a month ago, I posted a blog about the apparent success that PIABA had achieved in getting two US senators — a Democrat and a Republican — to sponsor a bill to require FINRA to create a fund from which unpaid arbitration awards — and, of course, unpaid claimants’ counsel fees — would be… Continue Reading
By Alan Wolper on Posted in Arbitration,FINRA,PIABAI have written before of the ferocious effort by PIABA lawyers to fight for their ability to collect attorneys’ fees on contingency matters – FINRA arbitrations – that they manage to win but which never get satisfied because the respondent broker-dealer has the temerity to go out of business rather than paying the award. PIABA… Continue Reading
By Alan Wolper on Posted in District Committees,FINRAMany people, myself included, are of the view that FINRA today remains a self-regulatory organization in name only. For years now, FINRA has taken a series of actions decried by its member firms – new rules, new interpretations of old rules, zealous enforcement of rules, the imposition of punitive sanctions – who correctly complain that… Continue Reading
By Alan Wolper on Posted in FINRA,Hiring practices,Rule 1017I don’t know how many times I’ve written about FINRA’s efforts over the years to address “rogue brokers,” or what it refers to nowadays more politically correctly as “high-risk brokers.” It doesn’t really matter what blog post you read, or when I wrote it, as they all tell essentially the same story: FINRA is just… Continue Reading
By Alan Wolper on Posted in Compliance,Fiduciary Rule,FINRA,Reverse churningA couple of years ago, I blogged about the concept of “reverse churning,” i.e., putting a customer who trades only infrequently into a fee-based account, thus costing the customer a lot more than it would have cost that customer to be in a commission-based account. The reason this became a topic was, at the time,… Continue Reading
By Alan Wolper on Posted in Arbitration,FINRA,MAP,PIABAI have often used this forum to complain about FINRA’s lack of backbone when it comes to dealing with PIABA, the group of lawyers who represent customers of broker-dealers, principally in arbitrations. Over the years, FINRA has amended its rules time and again in response to loud claims by PIABA that the arbitration process is… Continue Reading
By Alan Wolper on Posted in Arbitration,Expungement,FINRAExpungement is a funny thing, and here’s why: for years, claimants’ counsel have complained loudly to FINRA that expungement was being granted too frequently, that legitimate customer complaints were disappearing from CRD, resulting in an unfair, sanitized representation of brokers’ records that put unsuspecting customers at risk. As Andrew Stoltmann, PIABA’s president, put it so… Continue Reading
By Alan Wolper on Posted in Arbitration,FINRAI have used this forum before on occasion to complain about the vagaries of the FINRA arbitration process, and, in particular, the perspective of a respondent’s counsel that the game often seems to be rigged in favor of claimants. Let me give you an example that just occurred in the last two days. And let… Continue Reading
By Alan Wolper on Posted in Annual Report,Cybersecurity,Disclosure,FINRA,Outside business activitiesI would imagine that the point of FINRA releasing its list of exam priorities each year is to help firms who are actually going to be examined, by providing a glimpse into FINRA’s playbook so they can address, proactively, the issues they know FINRA will focus on. To be forewarned is to be forearmed, right? … Continue Reading
By Alan Wolper on Posted in Compliance,FINRA,Outside business activities,Rule 3270As I have discussed before, there are some rule violations that are going to happen no matter what FINRA says about them, no matter how many Enforcement cases it brings, and no matter what BDs do to “detect and prevent” such violations. A prime example of such is outside business activities, or OBAs. The rule… Continue Reading
By Alan Wolper on Posted in Enforcement,FINRA,Rule 8210Once again, Rule 8210 has me frustrated. And angry. Well, not the rule itself, but the aggressive manner in which FINRA continues to wield it, and how its scope is interpreted by hearing panels called upon to consider cases involving what seem to me, at least, to be troublesome uses of Rule 8210. Let’s start… Continue Reading
By Alan Wolper on Posted in Compliance,Enforcement,FINRA,SupervisionAs promised, FINRA has released its first Report outlining common findings from its examinations, in an effort to help member firms comply with the rules and, presumably, avoid problems that other firms encountered. A noble idea, especially for an entity not exactly known (at least lately) for its proactive measures to assist BDs with their… Continue Reading
By Alan Wolper on Posted in FINRA,PIABAA week or so ago, I highlighted in a post the acceptance speech of PIABA’s incoming president, Andrew Stoltmann, in which he announced his intent to wage “war” on the securities industry. Bluster aside, Andrew has been true to his word. His opening volley is an attack on the public governors who sit on FINRA’s… Continue Reading
By Alan Wolper on Posted in Arbitration,FINRA,PIABAI have stated more than once in these posts that among claimants’ counsel, I have perhaps the greatest respect for Andrew Stoltmann, a fellow Chicagoan. I am not saying that I ever agree with anything he has to say, because I don’t, but he is a gentleman, he acts ethically, he is fun to listen… Continue Reading
