Broker-Dealer

News & Analysis as of

Private Fund Advisers Must Pay Close Attention to Nuances under Pay-to-Play Restrictions in Light of Upcoming Elections Nationwide

As the elections approach nationwide, advisers to private investment funds with current or prospective state or local government entity investors should be mindful of political activities by their personnel which could raise...more

Don’t argue; the client is always right even when they are not

Over the years that I have defended broker-dealers and investment advisors on customer-initiated claims, I have seen many things that would make any compliance officer cringe. One spine tingling (not in the good way) type of...more

FINRA Proposes Revisions to Gifts, Gratuities and Non-Cash Compensation Rules

On August 5, 2016, FINRA in Regulatory-Notice 16–29 proposed revisions to its regulation of broker-dealer gifts, entertainment and non-cash compensation (the “proposal”) and requested comment to the same. The comment period...more

Investment Management Legal + Regulatory Update - August 2016

Regulation - Next on the SEC’s Regulatory Agenda: A Chief Valuation Officer? - First, the SEC required funds to designate a chief compliance officer. Then, the SEC proposed that funds designate a liquidity...more

Structured Thoughts: News for the financial services community, Volume 7, Issue 8

Brexit and Structured Products: A Framework for Considering Disclosures - The U.K.’s recent referendum to withdraw from the European Union has affected virtually all segments of the financial industry. The structured...more

FINRA Announces Sweep of Broker-Dealers that Sell Non-Traded BDCs

In a notice published on its website on August 4, 2016, FINRA announced that it is conducting an inquiry with respect to non-traded business development companies (BDCs). FINRA asked that the member broker-dealers send the...more

SEC Files Another Excessive Fee Case

The Commission brought another in a series of civil and criminal actions centered on charging excessive, undisclosed fees to clients transitioning their portfolios. SEC v. Place, Civil Action No. 2:16-c-4291 (E.D.Pa. Filed...more

Impact of DOL’s Final Rule on Business Development Companies

On April 6, 2016, the U.S. Department of Labor (DOL) released its final rule defining who is a fiduciary in connection with investment advice that is provided to benefit plans subject to the Employee Retirement Income...more

Why treating customer complaint with therapeutic neglect always fails

When faced with a customer complaining through a letter or email, it is human nature to try to appease the customer with a conciliatory response or no response at all. I have seen this “human nature” all too often when...more

MTC Annual Meeting Update: Market-Sourcing Regulations Presented to Executive Committee

On July 28, the Multistate Tax Commission (“MTC”) held its Executive Committee Meeting. The Executive Committee voted to accept the Uniformity Committee’s recommendations for a taxpayer’s prospective change in its method of...more

The SEC Audit Trail – Several Industry Groups See Problems as Currently Proposed

Last week, several securities industry groups filed critical responses to the SEC’s plan for an audit trail. While most groups that commented on the SEC’s proposed regulation supported implementing the proposal, several had...more

FinCEN Adopts New Customer Due Diligence Requirements for Financial Institutions

The Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) has adopted new anti-money laundering (“AML”) regulations that impose additional customer due diligence requirements on certain financial institutions...more

Regulatory Musical Chairs for Money

The SEC and FINRA continue to play musical chairs with staff resources allocated to examinations of investment advisers and broker-dealers. According to SEC Chair Mary Jo White’s remarks at an April 16 SEC Compliance...more

Pension Income Stream Products Worry FINRA

Some SEC-registered broker-dealers connect individuals wishing to cash in on their future pension payments with potential investors in such income streams. In April, the Financial Industry Regulatory Association (FINRA)...more

Financial Services Weekly News - July 2016 #3

Regulatory Developments - SEC Proposes Amendments to Update and Simplify Disclosure Requirements as Part of Overall Disclosure Effectiveness Review - On July 13, the Securities and Exchange Commission (SEC) proposed...more

Political Contributions to the Donald J. Trump Presidential Campaign Might Adversely Affect Advisers That Have or Are Seeking...

Last week, Donald J. Trump, the Republican nominee for U.S. president, selected Governor Mike R. Pence of Indiana as his running mate for vice president. The selection of Governor Pence might have implications under the SEC’s...more

SEC Proposes Rules to Enhance Order Handling Information Available to Investors

On July 13, 2016, the Securities and Exchange Commission proposed rules that “for the first time would require broker-dealers to disclose the handling of institutional orders to customers … [and] would expand the information...more

Securities Enforcement: 2016 Mid-Year Review

The Securities and Exchange Commission (the SEC or the Commission) brought over 400 enforcement actions in the first half of 2016 and is on pace to surpass its record of 807 enforcements actions in a single fiscal year, which...more

The “Fifth Pillar” of AML/BSA Compliance FinCEN Issues Final Rule for New Customer Due Diligence Requirements under the Bank...

For years, financial institutions have operated under the maxim that an effective anti-money laundering and Bank Secrecy Act compliance program (collectively “AML”) rests upon four pillars: (1) written policies and...more

"Contributions to Trump/Pence Campaign Are Subject to Pay-to-Play Rules"

On July 15, 2016, Donald Trump announced that he selected Indiana Gov. Mike Pence as his vice presidential running mate. Contributions to the Trump/Pence campaign are now subject to prohibitions and restrictions under the...more

FINRA to Assess Member Firms’ Culture

Speaking at the Brookings Institution this April, FINRA head Richard Ketchum emphasized the importance of a broker-dealer having a "culture" that favors the firm’s customers when their interests conflict with those of the...more

SEC Sanctions Unregistered EB-5 Investments Broker

We previously warned that some individuals involved with arranging EB-5 investments may be required to register as broker-dealers (see "Immigrant Investor Program Raises SEC Broker Registration Issues" in the Summer 2014...more

This Week In Securities Litigation

The SEC filed a settled FCPA action in which the employees in the China subsidiary of the firm designed and adopted a bribery scheme to circumvent the compliance procedures the company had installed as a result of an earlier...more

Disclosure Effectiveness Initiative Continues to Move Forward

On July 14, 2016, the Commission proposed for comment amendments that are intended to eliminate redundant, overlapping, outdated or superseded disclosure requirements. The amendments, if adopted, would apply to SEC reporting...more

FINRA Study of Financial Literacy: Many Investors May Not Have It

In July 2016, FINRA’s Investor Education Foundation released the findings from its National Financial Capability Study. The study suggests that, while in some ways Americans have increased their financial literacy, too...more

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