News & Analysis as of

Effect of Recent New York City Amendments May Limit Brokers and Advisers in Conducting Credit and Background Checks on Potential...

The New York City Council recently passed two amendments to the New York City Human Rights Law that are likely to substantially affect the manner in which firms in New York City may evaluate the qualifications and background...more

SEC Charges EB-5 Brokers For Not Registering

Multiple firms involved in the solicitation of investment capital for the Immigrant Investor Program (also known as "EB-5") have recently been charged by the SEC with acting as unregistered brokers. Neither In re Ireeco, LLC,...more

OCIE Warns on Suitability in Retail Sales of Structured Products

The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) issued a recent “Risk Alert” noting observed deficiencies in broker-dealer supervision and compliance controls over retail sales of structured products –...more

Scam Spammers Use IM Apps to Pump & Dump

In a September 2 Alert, FINRA warns that scammers are using messaging app spam-casts to impersonate brokers and tout micro-cap stocks to “pump” their prices, before “dumping” their positions at the top and leaving investors...more

This Week In Securities Litigation

The Government requested that the Supreme Court overturn U.S. v. Newman, the Second Circuit’s decision on tipping and the personal benefit test. Previously, the Second Circuit had declined a request to either rehear the case...more

SEC Issues Investor Alerts

Have you, a family member, a client or a friend ever been approached to make an investment where you were not sure if the person soliciting you to invest was trustworthy? If so, you are not alone. In fact, in response to...more

The Financial Report - Volume 4, No. 11 • June 2015 (Global)

FRB will extend high-quality liquid asset status to some state and municipal bonds. The FRB has proposed a rule that would recognize certain general obligation state and municipal bonds meeting the same liquidity...more

Going for Brokerages: FINRA and SEC Take Aim at Deficient Cyber Policies and Practices

On Feb. 3, the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) each released reports regarding cybersecurity issues for brokerage and advisory firms, both of which should be...more

FINRA Proposes Revised BrokerCheck Hyperlink Rule

On May 27, the Financial Industry Regulatory Authority filed a revised rule proposal with the Securities and Exchange Commission to amend FINRA Rule 2210. Specifically, the revised proposal would require each member firm’s...more

FINRA Launches BrokerCheck Media Blitz

The Financial Industry Regulatory Authority (“FINRA”) is the largest independent, not-for-profit regulator of securities firms conducting business in the United States. FINRA is authorized by the United States Congress to...more

The Financial Report - Volume 4, No. 6 • March 2015 (Global)

OSC Investor Advisory Panel annual report. The Ontario Securities Commission (OSC) Investor Advisory Panel submitted its 2013-14 annual report. The report summarizes the Panel’s current activities and priorities as well...more

Financial Services Weekly News Roundup - February 2015 #4

FDIC Study Shows Branch Banking Has Staying Power: Has your smartphone displaced your bank? According to an FDIC study released on February 19, traditional brick-and-mortar offices are maintaining their primacy, despite...more

Bridging the Week - February 2015 #2

Industry Watchdogs Warn Brokers and Advisory Firms on Cybersecurity Threats - Both the Securities and Exchange Commission and the Financial Industry Regulatory Authority published observations of their review of...more

This Week In Securities Litigation (Holiday wrap-up edition)

Through the holidays (Dec. 19 – 31, 2014) the Department of Justice and the SEC continued to file securities enforcement actions. The Department brought an FCPA case which is now number two on the top ten list for amounts...more

The Regulators Are Coming! The Regulators Are Coming!

Regulators, in-house lawyers and compliance officers told a serious cautionary tale at the recent Practicing Law Institute Broker-Dealer Regulation and Enforcement seminar. Representatives of the Securities and Exchange...more

U.S. Brokers Doing Business Overseas

Recently, regulators have made inquiries about the lawfulness of U.S. brokerage firms soliciting foreign clients. The regulators want to know under what exemptions or rules U.S. firms can do business overseas. This is a new...more

FINRA Announces and Publishes Its Sweep of Order Routing Practices

FINRA announced this week that it is conducting a review of its member firms’ order-routing processes and procedures and the execution quality of customer orders in exchange-listed stocks. We previously reported in this...more

Compliance Matters: Prior Disclosure = Future Exposure?

Broker and broker-dealer information is generally a few keystrokes or mouse-clicks away for anyone with an Internet connection, and regulators are working to shorten those paths. The information available is just as expansive...more

FAQ's on FINRA's Broker Compensation Proposal

On March 10, 2014, FINRA filed proposed Rule 2243 with the SEC. The proposed rule would require firms and registered reps to disclose certain financial incentives offered to reps in connection with a change in employment and...more

SEC Issues Ground-Breaking Guidance: Pierce Atwood Business Counselor Q1 2014

Historically, subject to only very limited and narrow exceptions, the Securities and Exchange Commission, and many state securities regulators, have taken the position that brokers, finders and other intermediaries could not...more

FINRA Proposes Significant Changes To Regulatory Regime For Limited Corporate Financing Brokers

The Financial Industry Regulatory Authority has issued Regulatory Notice 14-09 soliciting comments on a proposed new regulatory structure for firms that limit their activities to advising companies and private equity funds...more

Limited Corporate Financing Brokers

FINRA published Regulatory Notice 14-09 to solicit comments regarding a series of new rules that would be applicable to firms that perform certain limited functions. FINRA is proposing to establish a new, reduced regulatory...more

SEC Prevails in Ninth Circuit

The Ninth Circuit Court of Appeals denied a petition for review of an SEC Order upholding fines and sanctions against the firm and three of its employees. The underlying charges were based on alleged violations of Securities...more

SEC Intensifies Scrutiny of Fee-Based Accounts and Reverse Churning

The SEC is crunching a lot of data these days, and it apparently intends to use some of that data to identify “reverse churning.” Reverse churning is the practice of placing a client who trades infrequently in a fee-based,...more

New Congressional Bill Would Exempt Business Brokers From Full SEC/FINRA Broker Registration

On November 4, 2013, the U.S. House of Representatives Committee on Financial Services, by a 57-0 vote, ordered H.R. 2274 to be reported for further consideration. The bill, named the “Small Business Mergers, Acquisitions,...more

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