Securities & Exchange Commission Broker-Dealer

The United States Securities and Exchange Commission was created in 1934 in response to the Great Stock Market Crash of 1929. The Commission was created to protect investors, ensure fairness in the market, and... more +
The United States Securities and Exchange Commission was created in 1934 in response to the Great Stock Market Crash of 1929. The Commission was created to protect investors, ensure fairness in the market, and encourage capital formation. The Commission is headed by five presidentially-appointed Commissioners who oversee the Commission’s five divisions: Division of Corporation Finance, Division of Trading and Markets, Division of Enforcement, Division of Investment Management, and the Division of Risk, Strategy and Financial Information.  less -
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Bridging the Week - October 2014 #4

Senior Fed Officials Encourage Financial Industry Firms to Improve Compliance Culture - Enhancing culture was the theme at a workshop on “Reforming Culture and Behavior in the Financial Services Industry” held at the...more

Broker-Dealers Ignoring Red Flags Lead to SEC Releases and Enforcement Action

In October 2014, the SEC’s Division of Trading & Markets issued FAQs to remind broker-dealers of their obligation to conduct a reasonable inquiry when selling securities in an unregistered transaction in reliance on Section...more

What Does It Take to Make the SEC Happy? SEC Criticism of Broker-Dealers’ Due Diligence for Sales of Unregistered Securities...

To ensure that broker-dealers (BDs) do not inadvertently facilitate an unlawful distribution of securities, the Securities and Exchange Commission has long required BDs to conduct a “reasonable inquiry” into the circumstances...more

SEC Issues Risk Alert, Smacks E*Trade on Penny Stock Sales

On October 9th the SEC brought a settled administrative action against E*Trade Securities and G1 Execution Services (formerly E*Trade Capital Markets) for their part in the unregistered sales of billions of shares of penny...more

SEC Staff Finds that Broker-Dealers Still Are Not Conducting Adequate Section 5 Reviews

The staff of the SEC recently addressed broker-dealers’ obligations when engaging in transactions in unregistered securities by issuing FAQs and a Risk Alert that reported the results of examinations of a number of...more

Takeaways From Broker-Dealers’ Section 5 Inadequacies

The staff of the U.S. Securities and Exchange Commission recently addressed broker-dealers’ obligations when they engage in transactions in unregistered securities by issuing FAQs and a risk alert that reported the results of...more

Financial Services Weekly News Roundup - October 2014 #3

Editor’s Note - Looking Ahead: December 1 Effective Date for FINRA Consolidated Supervision Rules. The new FINRA Supervision rules, approved by the SEC in December 2013, become effective on December 1, 2014. The new...more

Referral Fees and Commission Sharing - When May Broker-Dealers Share Their Fees with Non-Brokers?

FINRA recently filed proposed rule changes with the SEC addressing when broker-dealers may pay referral fees or otherwise share compensation with persons who are not registered as broker-dealers. The proposed rule changes are...more

This Week In Securities Litigation

The Commission prevailed in three litigated decisions. The agency secured a favorable jury verdict in an action centered on an offering fraud. In two other cases — one based on misrepresentations regarding the only company...more

In Case You Missed It - Interesting Items for Corporate Counsel

The SEC reminded everyone that, yes, it cares whether you timely file your Section 16 reports, by announcing enforcement actions against 28 Section 16 filers and six public companies here. Some tie the unprecedented...more

SEC Publishes Risk Alert and FAQs Reminding Broker-Dealers of their Obligations In Unregistered Transactions

On October 9, the SEC announced publication of a Risk Alert and FAQs to remind broker-dealers of their obligations when they engage in unregistered transactions on behalf of their customers. ...more

Financial Regulatory Developments Focus - October 2014 #3

In this issue: - Derivatives - Bank Prudential Regulation & Regulatory Capital - Recovery & Resolution - Financial Services - Funds - People - Excerpt from...more

Orrick's Financial Industry Week in Review

ESMA Final Draft RTS for Central Clearing of Interest Rate Swaps under EMIR - On October 2, the European Securities and Markets Authority (ESMA) published a report containing final draft regulatory technical standards...more

It’s Going to be Harder to Sell Unregistered Securities

The SEC has issued a Risk Alert and FAQs to remind broker-dealers of their obligations when they sell unregistered securities on behalf of clients. This occurs when founders and employees sell their initial stakes in...more

Early Preview of 2015 SEC Exam Priorities

The SEC continues to set its sights on certain types of funds that it believes may present a higher risk of conflict of interest and confusion in the way they are designed and marketed. After signaling earlier this year that...more

SEC Charges Broker-Dealer for Failure to Protect Against Insider Trading by Employees

The Securities and Exchange Commission for the first time brought charges against a broker-dealer for failure to adequately protect against insider trading by its employees. The charges stem from a broker’s use of a...more

Broker-Dealer Beat - September 2014

The SEC recently settled an enforcement action against brokerage firm Monness, Crespi, Hardt & Co. ("MCH") for deficient insider trading procedures. This case is an important reminder of some key elements of effective insider...more

M&A Broker Exemption Bill Resurrects Financial Statement Replaced in 1988

Last week, the North American Securities Administrators Association withdrew its support for S. 1923 which, if enacted, would exempt “M&A brokers” from the broker registration requirements of the Securities Exchange Act of...more

Ninth Circuit Brookstreet Decision Upholds Control Person Liability

The Ninth Circuit recently found the principal of a broker-dealer liable for the extensive and aggravated sales practice violations of the firm’s registered representatives. In its unpublished decision (not to be cited as...more

A Compilation of Enforcement and Non-Enforcement Actions

SEC Proposes Extension of Principal Trade Rule for Registered Advisers/Broker-Dealers - The SEC has proposed extending to December 31, 2016, the sunset date for the expiration of Rule 206(3)-3T (the “Rule”) under the...more

How EB-5 Regional Centers and Sponsors Can Evaluate Broker-Dealer, Investment Company and Investment Adviser Registration...

This article is the first in a series of articles on how EB-5 regional centers and sponsors can evaluate broker-dealer, investment company and investment adviser registration requirements under U.S. securities laws....more

The Financial Report - Volume 3, No. 16 • August 21, 2014 (Global)

Discussion and Analysis - Recently, we’ve been thinking a lot about crowds. Most sources define the term “crowds” as a large group of people gathered closely together or with something in common. The Merriam-Webster...more

SEC Settles with Dually Registered Adviser Over Best Execution, Disclosure and Principal Transactions

The SEC settled administrative proceedings against an investment adviser, Dominick & Dominick LLC, a firm registered with the SEC both as an investment adviser and a broker-dealer (the “Adviser” or “D&D”), and Robert X....more

Unregistered Brokers: Watch out for Shortcuts

One of the things I’ve learned since returning to private practice three years ago is that people like to raise money for profitable enterprises when they can. And why not? It can be lucrative. And if the people raising...more

Lying to Examiners Can Lead Quickly to Criminal Charges

Hell hath no fury like a regulator (allegedly) lied to. This week, the SEC brought civil charges, and the U.S. Attorney for the Southern District of New York brought criminal charges, against a broker-dealer and its founder...more

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