News & Analysis as of

Broker-Dealer Registered Representatives

Holland & Knight LLP

Twinkle-Twinkle Little SAR: SEC & FINRA Settle with Broker-Dealers and Registered Rep

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In a series of settlements announced this year, the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) penalized several broker-dealers for allegedly failing to file...more

UB Greensfelder LLP

You Should Understand The Difference Between Violating A Firm Policy And Violating A FINRA Rule . . . Even If FINRA Doesn’t

UB Greensfelder LLP on

FINRA, of course, has lots, and lots, of rules. Heck, it has rules about making rules. The things that RRs can and cannot do per those rules are strictly proscribed, mostly in great detail. Things that ordinary people can...more

Littler

Form U5 Defamation Claims on the Rise at FINRA: Be Prepared!

Littler on

Under Financial Industry Regulatory Authority’s (FINRA) rules, whenever broker-dealers, registered investment advisers, or issuers of securities (FINRA member) terminate the employment of a FINRA-registered representative,...more

Kilpatrick

Iowa Proposes State-Specific Best Interest Rules for Insurance and Securities Businesses (Updated)

Kilpatrick on

UPDATE: As of December 30, 2020, Arizona, Arkansas, Michigan, and Rhode Island have joined Iowa in adopting the NAIC model rule for best interest standard in annuity sales. Alabama, Delaware, Kentucky, Maine, Nevada and Ohio...more

UB Greensfelder LLP

FINRA AWC Provides New Defense To Allegation Of “Willfulness”

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I dare you. In fact, I double-dog dare you to figure out how or why FINRA decides to charge willfulness in some cases but not in others. Bottom line is that it is nearly impossible (except if you’re a big firm, in which case...more

Troutman Pepper

SEC Proposes Finders Exemption

Troutman Pepper on

At the October 7, 2020 open meeting of the Securities and Exchange Commission (SEC), Chairman Jay Clayton announced that the Staff of the Commission proposed to grant exemptive relief, permitting natural persons to engage in...more

Fox Rothschild LLP

Transaction-Based Compensation Requires Registration . . . Period

Fox Rothschild LLP on

FINRA’s National Adjudicatory Counsel (“NAC”), recently, affirmed a disciplinary panel decision significantly sanctioning a broker-dealer for paying unregistered persons and entities. FINRA alleged, among other things,...more

UB Greensfelder LLP

Securities Regulators In The Age Of Covid-19

UB Greensfelder LLP on

While much of the broker-dealer world has been trying to figure out how to protect the financial welfare of their customers, in addition to watching Netflix and searching in vain for Lysol wipes online, our trusty securities...more

Kilpatrick

Iowa Proposes State-Specific Best Interest Rules for Insurance and Securities Businesses

Kilpatrick on

UPDATED: MAY 12, 2020: Yesterday, Iowa adopted its proposed regulation requiring annuity agents to act in the best interest of consumers, but delayed adoption (or revision, withdrawal) of the companion securities rules. The...more

UB Greensfelder LLP

PIABA's Anti-Expungement Tirade Is Predictably Short On Facts

UB Greensfelder LLP on

Here is how PIABA’s one-track mind operates: in a Report it just issued, PIABA laments the frequency with which registered reps are able to get customer complaints expunged from their records. The sole reason for this, PIABA...more

UB Greensfelder LLP

FINRA’s Secret Power To Control Information

UB Greensfelder LLP on

In the past week, I ran across two discrete instances in which FINRA acts as a secret gatekeeper of sorts, exercising its own subjective judgment, without anyone knowing what, exactly, it is doing or why, employing...more

UB Greensfelder LLP

It Is Not Possible To Predict When FINRA Will Charge Something As Willful. Or Is It?

UB Greensfelder LLP on

I have written a few times about FINRA’s ceaseless interest in bringing cases against registered reps who fail to update their Form U-4 in a timely manner to disclose the fact that a tax lien has been filed against them. Or...more

Faegre Drinker Biddle & Reath LLP

Best Interest Standard of Care for Advisors #9

Regulation Best Interest: The Focus on Costs (Part 1) - The SEC has issued its final Regulation Best Interest (Reg BI), Form CRS Regulation, RIA Interpretation and Solely Incidental Interpretation. I am discussing the...more

UB Greensfelder LLP

Is FINRA’s New Regulatory Notice On Departing Reps A Unicorn?

UB Greensfelder LLP on

FINRA came out with a slightly weird Regulatory Notice last week. In a succinct document, barely over two pages, FINRA addressed something that may, or may not, actually be of concern to anyone. In short, Regulatory Notice...more

UB Greensfelder LLP

Wedbush Learns That It’s Not Enough Just To Spot Red Flags

UB Greensfelder LLP on

I 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...more

BCLP

In Finding a Failure to Reasonably Supervise, SEC Highlights Responsibilities of Firms to Create Clear, Written Investigatory...

BCLP on

A recent Securities and Exchange Commission (“SEC”) order imposed sanctions on a financial institution for failing to reasonably supervise a representative’s conduct. In its findings, the SEC highlights the institution’s...more

Kilpatrick

FINRA Issues Guidance Re Customer Communications on Departing Registered Reps

Kilpatrick on

Last week FINRA issued guidance (Regulatory Notice 19-10) with respect to communications with customers about registered representatives (“RRs”) who have left a broker-dealer (the “Notice”). With increased frequency, RRs...more

UB Greensfelder LLP

FINRA Is Going After “High-Risk” Firms, But First Has To Invent The Definition Of High-Risk

UB Greensfelder LLP on

I told you two weeks ago in my blog post that this would happen. I told you that when Robert Cook announced the topics to be taken up at the February/March FINRA Board meeting in Boca Raton, he slipped and used the new phrase...more

UB Greensfelder LLP

Yes, You Can Form A Broker-Dealer Without Running Afoul Of FINRA’s Outside Business Activities Rule

UB Greensfelder LLP on

It is not a wise career move for a registered rep to leave his broker-dealer – thereby abandoning his customers, and affording competitors the opportunity to make his customers their own – and then to begin the long,...more

Burr & Forman

FINRA Proposes New Rule Concerning Outside Business Activities

Burr & Forman on

FINRA currently requires registered representatives to inform their broker-dealer of any proposed outside business activities that they may be engaging in so that the firms can determine whether to permit the representative...more

Polsinelli

SEC Finally Approves FINRA’s Watered-Down Recruitment Broker Bonus Disclosure Rule

Polsinelli on

Lost in the commotion surrounding the Department of Labor's new fiduciary rule was the Securities and Exchange Commission's approval of FINRA's recruitment bonus disclosure rule, which requires action by broker dealers when...more

Carlton Fields

Avoiding a Messy Break-Up: How a Firm’s Investigation Can Deflect a Financial Advisor’s Form U-5 Defamation Claim

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Breaking up is hard to do. In the investment industry, it can be even harder because one half of the couple needs to publish the reasons for the break-up. When a registered representative separates from a broker-dealer...more

Carlton Fields

FINRA Targets Stockbroker’s Impermissible Transfer of Client Account Information

Carlton Fields on

FINRA recently settled an action against a registered representative of a broker-dealer for alleged violations regarding the safeguarding and use of private consumer data. The broker accepted and consented to the settlement...more

Broker-Dealer Compliance + Regulation

Show Us the Money: FINRA Initiates Sweep Relating to Compensation Practices

FINRA has made no secret of its interest in broker compensation, and the potential conflicts of interest that can be generated by some types of compensation practices. FINRA discussed these issues in its 2015 annual...more

Proskauer - Corporate Defense and Disputes

FINRA’s New Background Investigation Rule Will Likely Increase Firms’ Costs and Potentially Increases Exposure for Firms in...

Recently, the SEC approved FINRA’s proposed new Rule 3110(e) relating to background investigations of registered persons. FINRA Rule 3110(e), which replaces NASD Rule 3010(e) and goes into effect on July 1, 2015, streamlines...more

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