Last week, a divided Securities and Exchange Commission adopted a set of rule changes requiring next-day (T+1) settlement of most equity trades by May 24, 2024. The suite of rules also require same-day trade allocations and...more
Every year the Financial Institution Regulatory Authority (FINRA) issues its “Report on FINRA’s Examination and Risk Monitoring Program.” The Report covers issues noted during the prior year’s exams and topics that examiners...more
1/13/2023
/ Anti-Money Laundering ,
Best Execution ,
Books & Records ,
Cryptocurrency ,
Examination Priorities ,
Financial Crimes ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Form CRS ,
Market Manipulation ,
Regulation Best Interest ,
Securities Transactions ,
Variable Annuities
On March 31, 2022, the Securities Industry and Financial Markets Association (“SIFMA”) released its after-action report on Quantum Dawn VI – a global financial-markets cybersecurity exercise....more
Over the last couple of decades, the securities self-regulatory organization FINRA (f/k/a NASD) informs its membership each year of what compliance risks are noted by its examination program. Those are risks firms should...more
2/10/2022
/ Anti-Money Laundering ,
BSA/AML ,
Capital Raising ,
Compliance Monitoring ,
Crowdfunding ,
Cybersecurity ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Markets ,
Form CRS ,
Influencers ,
Municipal Securities Market ,
Regulation BI ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC) ,
Special Purpose Acquisition Companies (SPACs)
On August 27, the Securities and Exchange Commission (“SEC”) issued a broad request for information and comments on “gamification” in financial-market user interfaces, including artificial intelligence and machine learning,...more
8/31/2021
/ Artificial Intelligence ,
Broker-Dealer ,
Comment Period ,
Digital Platforms ,
Financial Markets ,
Investment ,
Machine Learning ,
Regulatory Agenda ,
Retail Investors ,
Rulemaking Process ,
Securities and Exchange Commission (SEC)
The Financial Industry Regulatory Authority (“FINRA”) recently kicked off a “sweep” examination with its August 2021 Targeted Exam Letter on “practices and controls related to the opening of options accounts and related...more
In an SEC filing Friday, February 26, Robinhood Financial and Robinhood Securities disclosed they are negotiating with FINRA, the SEC, and state regulators, attempting to settle investigations into options-trading and outages...more
The Deposit Trust & Clearing Corp. (“DTCC”) released a February 24 roadmap for shortening the settlement cycle for US equities by half over the next two years. The proposal anticipates DTCC’s completion of its “Project ION”...more
During the height of the GameStop (NYSE: GME) mania, Slate author Jordan Weissman explained that “[A]t a moment that the markets are being overrun, for better or worse, by posters who’ve basically dedicated themselves to...more
2/10/2021
/ Financial Conduct Authority (FCA) ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Markets ,
GameStop ,
Market Manipulation ,
Market Volatility ,
Reddit ,
Securities and Exchange Commission (SEC) ,
Securities Transactions ,
Short Selling ,
Stock Prices ,
Stock Trades ,
UK
On Thursday, January 28, trading-app broker-dealer Robinhood – a self-styled disrupter democratizing trading – suspended its users’ ability to buy Gamestop stock or options (along with other stocks). After playing a...more
2/5/2021
/ Brokerage Accounts ,
Brokers ,
Class Action ,
Conflicts of Interest ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Markets ,
GameStop ,
Legislative Agendas ,
Robinhood Financial ,
Securities and Exchange Commission (SEC) ,
Stock Trades
On February 1, 2021, the Financial Industry Regulatory Authority (“FINRA”) released its “Report on FINRA’s Risk Monitoring and Examination Activities.” The Report combines two of FINRA’s long-standing reports: (a) the...more
2/3/2021
/ BSA/AML ,
CARES Act ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Industry Examinations ,
Paycheck Protection Program (PPP) ,
Private Placements ,
Regulatory Oversight ,
Social Media ,
Stock Trades ,
Variable Annuities
FINRA held its bi-annual Cybersecurity Conference in January and recently published five take-away real-world experiences from the conference...more
2/27/2020
/ Anti-Money Laundering ,
C-Suite Executives ,
Consumer Protection Laws ,
Cybersecurity ,
Data Breach ,
Data Management ,
Data Protection ,
Data Security ,
Digital Assets ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Markets ,
FinTech ,
Hackers ,
Information Governance ,
Information Security ,
Information Technology ,
Initial Public Offering (IPO) ,
Liquidity Management ,
MSRB ,
Municipal Advisers ,
OCIE ,
Phishing Scams ,
Popular ,
Regulation BI ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC) ,
Vulnerability Assessments
On November 8, the SEC filed its first settled enforcement action against cryptocurrency trading platform for operating as an unregistered exchange trading securities, in violation of the Securities Exchange Act of 1934....more
11/19/2018
/ Cryptocurrency ,
Cyber Crimes ,
Digital Currency ,
Enforcement Actions ,
Financial Markets ,
Initial Coin Offering (ICOs) ,
Investment Opportunities ,
Regulatory Oversight ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Token Sales ,
Unregistered Securities ,
Virtual Currency
After Bitfinex, the CFTC issued its Proposed Interpretation on “Retail Commodity Transactions Involving Virtual Currency.” Proposed Interpretation, 82 Fed. Reg. 60335 (CFTC Dec. 20, 2017). Although the comment period closed...more
9/19/2018
/ Bitcoin ,
Blockchain ,
CFTC ,
Commodities ,
Cryptocurrency ,
Digital Currency ,
Distributed Ledger Technology (DLT) ,
Financial Instruments ,
Financial Markets ,
Initial Coin Offering (ICOs) ,
Interpretive Opinions ,
Jurisdiction ,
Popular ,
Regulatory Oversight ,
Token Sales ,
Virtual Currency
In a series of 2015 decisions, the CFTC determined that virtual currency is a commodity subject to its jurisdiction.
In a 2016 settled enforcement action, the CFTC took the position that an unregistered platform...more
9/18/2018
/ Bitcoin ,
Blockchain ,
CFTC ,
Commodities ,
Cryptocurrency ,
Digital Currency ,
Distributed Ledger Technology (DLT) ,
Financial Instruments ,
Financial Markets ,
Initial Coin Offering (ICOs) ,
Jurisdiction ,
Regulatory Oversight ,
Token Sales ,
Virtual Currency
The 2011 Dodd-Frank Act amended the CFTC’s jurisdiction to authorize regulation of “retail commodity transactions offered ‘on a leveraged or margined basis, or financed by the offeror, the counterparty, or a person acting in...more
9/17/2018
/ Bitcoin ,
Blockchain ,
CFTC ,
Commodities ,
Cryptocurrency ,
Digital Currency ,
Distributed Ledger Technology (DLT) ,
Financial Instruments ,
Financial Markets ,
Initial Coin Offering (ICOs) ,
Jurisdiction ,
Popular ,
Regulatory Oversight ,
Token Sales ,
Virtual Currency
This is Part 3 of a seven-part series of posts looking at some broad legal issues affecting crypto-currencies.
...more
9/12/2018
/ Bitcoin ,
Blockchain ,
Commodities ,
Cryptocurrency ,
Digital Currency ,
Distributed Ledger Technology (DLT) ,
Exchange-Traded Products ,
Financial Instruments ,
Financial Markets ,
Financial Transactions ,
Initial Coin Offering (ICOs) ,
Investment ,
Jurisdictional Determination (JD) ,
Money Transmitter ,
Popular ,
Regulatory Oversight ,
Retail Investors ,
Token Sales ,
Trading Platforms ,
Virtual Currency
Effective April 3, 2017, all FINRA arbitration participants (except pro se parties) must use FINRA’s web-based DR-Portal to file and serve documents in both customer and industry arbitrations.
...more
2/8/2017
/ Arbitration ,
Electronic Filing ,
Filing Requirements ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Investment ,
Mediation ,
Portal ,
Pro Se Litigants ,
Securities ,
Securities and Exchange Commission (SEC)
The White House clarified that Trump’s January 30 “two for one” Executive Order doesn’t apply to the SEC and other independent regulatory agencies, Reuters reported.
...more
After markets closed on Friday the 13th, the U.S. Department of Justice (“DOJ”) announced an $864 million settlement regarding Moody’s credit ratings of residential mortgage-backed securities (“RMBS”) and collateralized debt...more
1/19/2017
/ Civil Monetary Penalty ,
Collateralized Debt Obligations ,
Cooperative Compliance Regime ,
Credit Rating Agencies ,
Credit Ratings ,
Department of Justice (DOJ) ,
Financial Crisis ,
Financial Institutions ,
Financial Markets ,
FIRREA ,
Moody's ,
Rating Agencies ,
RMBS ,
Securities ,
Securities Violations ,
Settlement
OCIE released its 2017 exam priorities on January 12. The priorities list was most notable for being shorter than prior years. But that likely means only more focus, rather than less vigor....more
1/13/2017
/ BSA/AML ,
Cybersecurity ,
ETFs ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Investment ,
Investment Adviser ,
Money Market Funds ,
Municipal Advisers ,
OCIE ,
Pensions ,
Private Funds ,
Recidivism ,
Retail Investors ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC)
The Port Authority of New York and New Jersey has admitted wrongdoing and agreed to pay a $400,000 penalty to settle SEC charges that it failed to adequately disclose project risks to investors purchasing $2.3 billion in...more
On January 4, new President and CEO Richard Cook issued FINRA’s Annual Regulatory and Examination Priorities Letter. This year’s list in summary is:
New for 2017:
Targeted electronic off-site reviews “on select...more
1/6/2017
/ Big Data ,
BSA/AML ,
Cybersecurity ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Industry Examinations ,
Liquidity Risk Management Rule ,
Market Manipulation ,
Mutual Funds ,
Regulatory Agenda ,
REIT ,
Risk Management ,
Risk Mitigation ,
Securities ,
Spoofing
A unanimous Supreme Court reaffirmed the “gifting” theory of insider trading under Dirks and rejected Newman “to the extent” it required more.
The Court’s long-standing rule in Dirks v. SEC, 463 U.S. 646, 664 (1983)...more
12/7/2016
/ Confidential Information ,
Dirks v SEC ,
Financial Markets ,
Illegal Tipping ,
Insider Trading ,
Non-Public Information ,
Personal Benefit ,
SCOTUS ,
Securities Violations ,
Tippees ,
Tippers ,
US v Newman ,
US v Salman
The Public Investors Arbitration Bar Association (PIABA) renewed its criticism of FINRA’s Broker-Check® system in a report issued in late October. PIABA was especially critical of the system’s:
Lack of synchronization...more