FINRA Enforcement has often been accused (again, admittedly, by me, and not too infrequently) of going after the “low-hanging fruit,” that is, taking the easy case when it presents itself. Putting aside the question whether...more
So I spent last week – the whole week – doing an arbitration with JAMS. It involved some of the typical elements of a FINRA claim, e.g., allegations of the sale of an unregistered security, of an “investment” gone bad, of...more
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
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
FINRA is often accused (mostly rightfully, and certainly by me) of being a horse-is-already-out-of-the-barn sort of regulator, jumping on an issue only after the problem has already arisen and made it to the front page of the...more
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
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
As everyone knows, back in the 1980s, broker-dealers fought hard for the ability to include in a customer agreement a clause mandating that all disputes be dealt with in the arbitration forum, rather than in court. It was...more
My friend and former colleague, Brian Rubin, publishes annually his analysis of FINRA Enforcement cases, spotting trends in terms of the number and types of matters it brings, the sanctions meted out, etc. It is an excellent...more
I get the fact that anyone silly enough to work for a broker-dealer knowingly chooses to live in a fishbowl. Thanks to BrokerCheck, you can very easily learn more about a registered representative than you can about, say, a...more
I just read this article... – admittedly authored by lawyers, Ethan Brecher and Ana Montoya, whose website provides that one of their three principal areas of practice is representing investors “who have been defrauded by...more
I have always found it enlightening – and a bit scary – to talk to my clients about FINRA Rule 2210, the advertising (or “communications with the public”) rule, to see what they know about it. It’s a long, dense rule, so I’m...more
Almost three years ago, in Reg Notice 18-08, FINRA wisely (but, nevertheless, still a bit late to the party) proposed to revise its own prior guidance regarding the troublesome intersection between outside business activities...more
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
1/29/2021
/ Broker-Dealer ,
Chief Compliance Officers ,
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Documentation ,
Due Diligence ,
Enforcement Actions ,
Ethics ,
Financial Industry Regulatory Authority (FINRA) ,
Investment Adviser ,
Securities and Exchange Commission (SEC) ,
Settlement ,
Supervision
Historically, one of the surest ways to get yourself permanently barred from the industry is to forge a customer’s signature on something. According to the pertinent Sanction Guideline, at a minimum, a forgery, that is, a...more
1/25/2021
/ Acceptance ,
Broker-Dealer ,
Consent ,
Customers ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Fines ,
Forgery ,
Professional Disciplinary Actions ,
Securities and Exchange Commission (SEC) ,
Settlement ,
Waivers
Join Ulmer partners Alan M. Wolper and Michael A. Gross as they address hot topics, including recent rule changes, exam priorities, and other FINRA developments....more
1/25/2021
/ Banking Sector ,
Broker-Dealer ,
Chief Compliance Officers ,
Continuing Legal Education ,
Corporate Counsel ,
Examination Priorities ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Services Industry ,
Fund Managers ,
Investment Banks ,
Investment Companies ,
Retail Banks ,
Risk Management ,
Webinars
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
1/20/2021
/ Annual Reports ,
Board of Directors ,
Broker-Dealer ,
Comptroller ,
Financial Industry Regulatory Authority (FINRA) ,
Investment Adviser ,
OCC ,
Regulatory Oversight ,
Regulatory Requirements ,
Securities and Exchange Commission (SEC) ,
Supervision
While undoubtedly FINRA will be issuing its annual “examination priorities” letter any day now, that is hardly the best way to figure out exactly what FINRA is paying attention to now (as that letter kind of reads the same,...more
“The SEC score(s) one for the digital age.” These are the words of SEC Commissioner Heist, though, not my own. After a nearly year-long comment period, the SEC announced last week that it was replacing its former advertising...more
12/31/2020
/ Advertising ,
Compliance ,
Endorsements ,
Form ADV ,
Investment Adviser ,
Investors ,
Marketing ,
New Rules ,
Ratings ,
Securities and Exchange Commission (SEC) ,
Supervision ,
Third-Party
Not too long ago, I posted a blog complaining that FINRA’s Nominating Committee had basically abdicated its responsibility to identify suitable candidates for certain seats on FINRA’s Board. Perhaps not surprisingly, I never...more
There is a little corner of the FINRA world that most people never have the need or desire to visit, and that’s the not-so-quaint village of statutory disqualification. SD, for short. I have written about this sad place...more
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
As everyone is likely well aware, one of the principal changes that happened when FINRA retired the old suitability rule – NASD Rule 2310 – and replaced it with shiny new FINRA Rule 2111 back in 2012 was the broadening of the...more
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
Attentive readers will recall that a couple of weeks ago, I mentioned in a preface to great post from Chris about expungement becoming an endangered creature due to changes in FINRA rule that I was about to embark on a...more