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Broker-Dealer Supervision

Goodwin

FINRA Approves Remote Branch Inspection Pilot Program

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On January 23, 2024, FINRA announced the addition of new Supplementary Material .18 to FINRA Rule 3110 (Supervision) to adopt a voluntary, three-year remote inspections pilot program (Pilot Program) to allow eligible members...more

Goodwin

FINRA Re-Proposes Work-From-Home Supervisory Locations

Goodwin on

Firms would be able to treat private residences as non-branch offices instead of OSJs under certain circumstances. FINRA hopes to align its supervisory rules with current work-from-home practices....more

Faegre Drinker Biddle & Reath LLP

And Now for the SEC’s First Substantive Reg BI Action

We have made it a point previously in this blog to track developments of the SEC’s Regulation Best Interest (Reg BI), even speculating more aggressive enforcement actions could be coming due to certain Reg BI deficiency...more

Goodwin

FINRA Proposes Remote Inspection Pilot Program

Goodwin on

​​​​​​​FINRA recently proposed amendments to FINRA Rule 3110 (Supervision) to adopt a voluntary, three-year pilot program (Pilot Program) to allow member firms to conduct remote branch office inspections.  In a nod to where...more

Faegre Drinker Biddle & Reath LLP

SEC Examinations 2022 Priorities: Reg BI, ESG, Private Funds, Information Security & Operational Resiliency, and Crypto

The SEC Division of Examinations recently released its 2022 Division of Examinations “Priorities.” The 2022 Priorities provide critical insight into what the Division of Examinations (the “Division”) considers the most...more

Latham & Watkins LLP

When Are CCOs on the Hook? FINRA Offers Guidance on CCO Liability

Latham & Watkins LLP on

Guidance clarifies assessment of liability under Rule 3110, including designation as supervisor, application of reasonableness standard, and factors for and against charging compliance officials. On March 17, 2022, the...more

Faegre Drinker Biddle & Reath LLP

FINRA Wades into the Controversial Deep-End of CCO Supervisory Liability

The lack of specific guidance regarding failure to supervise liability for chief compliance officers (“CCOs”) has been a controversial and opaque topic that both FINRA and the SEC have struggled with for well over a decade....more

Sherman & Howard L.L.C.

Employer Accountable for Employee Social Media

In the matter of MML Investors Services, LLC, an employee “ran rampant on his personal social media,” but the company is the one taking the rap for failure to supervise its employee. The company’s employees, as registered...more

BCLP

Supervision of Vendors When Outsourcing - The Buck Stops with FINRA Member Firms

BCLP on

Key Takeaways: ..On August 13, 2021, FINRA issued Regulatory Notice 21-29 (“RN 21-29”) to remind member firms that they must establish and maintain an adequate supervisory system, including written supervisory procedures...more

UB Greensfelder LLP

Securities America SEC Settlement Raises Prospect Of New Supervisory Standard

UB Greensfelder LLP on

There have been tons of cases where firms got in trouble – in AML trouble, which is one the worst kinds of trouble – for failing to be sufficiently on top of third-party wires, i.e., where a customer wires money not to...more

UB Greensfelder LLP

SEC Settlement Is A Wake-Up Call To Review Outdated Procedures

UB Greensfelder LLP on

Most securities regulations, by design, create a gray world where compliance is not crystal-clear, but, rather, subject to interpretation. After all, what you think constitutes “reasonable” supervision and what FINRA or the...more

Faegre Drinker Biddle & Reath LLP

NYC Bar Association Proposes a CCO Enforcement Framework

Responding to a “concern” from Chief Compliance Officers (CCOs) to the purported increase in enforcement actions holding compliance personnel personally liable, the New York City Bar Association recently released a framework...more

Faegre Drinker Biddle & Reath LLP

SEC’s Director of Enforcement Unexpectedly Resigns Just Days after Taking the Job: Reminiscent of Previous Resignation by former...

Alex Oh, U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler’s pick for the agency’s Director of the Division of Enforcement, unexpectedly resigned on Wednesday amid growing criticism for her decades-long work as...more

UB Greensfelder LLP

FINRA’s New Rules Are A Game-Changer, Especially When It Comes To Hiring . . . And Not In A Good Way

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For many years, FINRA has attempted in several settings to substitute objective criteria for subjective ones, to try and make things easier for itself, and to make things more consistent from district to district and from...more

UB Greensfelder LLP

Credit Suisse Runs Into Trouble Trying To Monitor Outside Brokerage Accounts, Despite Its Best Intentions

UB Greensfelder LLP on

Sometimes, the numbers that FINRA cites in its settlements with big broker-dealers are so ridiculously large that it’s nearly impossible to compare these cases with those brought against small firms for similar rule...more

UB Greensfelder LLP

If You Supervise Yourself - Which You Cannot Do - Make Sure You Do It Right

UB Greensfelder LLP on

I have always operated with the understanding that, per FINRA rules, one cannot supervise him- or herself. Hardly an outrageous proposition. Today, however, that fundamental, bedrock understanding was so shaken, it has left...more

Fox Rothschild LLP

Leaving Is The Hardest Part Especially If You Want To Re-Enter The Securities Industry

Fox Rothschild LLP on

We were recently reminded of how difficult it is to re-register for a position in the securities industry after being barred. See https://www.sec.gov/litigation/admin/2021/ia-5682.pdf. On February 9, 2021, the United...more

UB Greensfelder LLP

SEC Settlement Proves That When CCOs Spot A Problem, Silence Is Not Golden

UB Greensfelder LLP on

A long time ago, long before there existed any whistleblower statutes, I had a client – a CCO of a broker-dealer – who discovered some pretty funky trading at his firm. As he tells the story, when he went to see his boss (who...more

Faegre Drinker Biddle & Reath LLP

SEC Enforcement Victory in its Efforts to Police Cannabis Industry Investments

As the cannabis industry continues to evolve and generate capital raising and investment opportunities, the SEC Division of Enforcement will continue to closely keep watch and target the bad actors that new market...more

Faegre Drinker Biddle & Reath LLP

President Biden Announces Gary Gensler as SEC Chair Nominee

On January 18, 2021, the incoming President’s Transition Team announced additional key administration post nominees, including Mr. Gary Gensler as SEC Chair. The announcement specifically provided the following regarding Mr....more

UB Greensfelder LLP

LPL AWC Proves, Once Again, That Big Firms Can Buy Their Way Out Of Trouble That Would Kill Small Firms

UB Greensfelder LLP on

LPL may be the biggest BD in the country, with 21,500 reps operating out of almost 13,000 branch offices. Heaven knows how much money it brings in every year, but, goodness, it must be a lot. And good thing, too, given how...more

UB Greensfelder LLP

Let’s Hear It For CCOs; After All, They Are Human People

UB Greensfelder LLP on

We have frequently blogged here about the degree of attention that regulators pay to Chief Compliance Officers, and whether it is proper that they sometimes are named individually in Enforcement actions. And we are hardly...more

UB Greensfelder LLP

How NOT To Supervise For Churning

UB Greensfelder LLP on

As should be clear to readers of this Blog, I find that Enforcement actions often provide the best guidance in terms of what regulators deem to be unacceptable conduct, which is very useful when dealing with subjective...more

Foley Hoag LLP

SEC Office of Compliance Inspections and Examinations Issues COVID-19 Risk Alert to Broker-Dealers and Investment Advisers

Foley Hoag LLP on

On August 12, 2020, the SEC Office of Compliance Inspections and Examinations (OCIE) published a Risk Alert that identifies potential issues related to the COVID-19 pandemic for SEC-registered investment advisers and...more

Faegre Drinker Biddle & Reath LLP

What’s New, and Comings & Goings at the SEC

What’s New, and Comings & Goings at the SEC - What’s New: The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) recently issued a Risk Alert titled “Select COVID-19 Compliance Risks and Considerations for...more

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