My young boys will sometimes chase me around the house, catch me, and yell “gotcha” as they drag me off to their pretend jail. No matter how much I plead that I’ve done nothing wrong, I always end up in jail, despite having...more
12/19/2019
/ Broker-Dealer ,
Conflicts of Interest ,
Disclosure Requirements ,
Failure To Disclose ,
Investment Adviser ,
Investment Management ,
Investors ,
Lack of Interpretive Guidance ,
Regulation Best Interest ,
Regulation BI ,
Regulatory Requirements ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Securities Transactions
Michael Gross and Alan Wolper will discuss outside business activities, the 2019 report of exam findings and observations, and internal changes at FINRA.
...more
This post is about Reg BI, but if you really want to learn about it, as opposed simply to listening to me gripe, I urge you to register for the webcast that my partners Heidi VonderHeide and Rob Betman will present on...more
As I have mentioned before, several times, PIABA is deathly concerned with the fact that sometimes customers who prevail in arbitrations are unable to collect their awards, which typically happens when the respondent firm...more
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
10/23/2019
/ Arbitration ,
Arbitrators ,
Broker-Dealer ,
Consumer Complaint Management ,
Expungement ,
False Evidence ,
Financial Industry Regulatory Authority (FINRA) ,
Investment Firms ,
Investment Management ,
Public Records ,
Registered Representatives
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
Last year, for the first time, FINRA produced a statistical report designed to provide some perspective on the firms that comprise its membership. I blogged about it, and concluded at the time that the report basically...more
Anyone who has sat through a talk by financial regulators is undoubtedly familiar with the refrain from the individuals that they do not speak for the Commission and that the opinions offered are their own. Even with that...more
9/30/2019
/ Broker-Dealer ,
CFTC ,
Cryptocurrency ,
Cybersecurity ,
Enforcement ,
Financial Regulatory Agencies ,
Popular ,
Regulation Best Interest ,
Regulatory Oversight ,
Retail Investors ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Self-Reporting ,
Transparency
I was catching up on my reading and came across a column in Investment News by Mark Schoeff that described the results of a recent FINRA arbitration, results which I found a bit alarming. I caution you: reading too much into...more
9/25/2019
/ Arbitration ,
Arbitration Awards ,
Broker-Dealer ,
Compensatory Damages ,
Investment Adviser ,
Investment Firms ,
Investment Management ,
Investors ,
Liability ,
Registered Investment Advisors ,
Securities Transactions ,
Unregistered Brokers
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
Once again – twice again, actually – FINRA has used Rule 8210 as a cudgel, beating the poor unfortunate recipients of the “request” for documents and information into submission, or worse. This has got to stop.
The first...more
9/3/2019
/ Books & Records ,
Computer Hard Drives ,
Discovery ,
Discovery Disputes ,
Document Productions ,
Electronically Stored Information ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Objections ,
Request For Information ,
Search & Seizure
I read an article this week in Investment News with the following headline: “Brokerage Customers Winning More FINRA Arbitration Cases.” As a guy who defends customer cases, I was naturally intriguied by this. According to the...more
What is it with big firms and fingerprints? You may recall back in October 2017, J.P. Morgan entered into an AWC with FINRA in which it agreed to pay a $1.25 million fine for the following, as described in FINRA’s press...more
Rightly or wrongly, I don’t know much about cryptocurrencies or digital coins. But that’s ok. What is worrisome, on the other hand, is that I am increasingly concerned that FINRA doesn’t either. And while my own ignorance...more
If you read this blog even semi-regularly, you know that I have taken a few shots at PIABA. I think they’re well earned, but some people – particularly PIABA lawyers, not surprisingly – have suggested that I’m overdoing it....more
FINRA loves to tout its supposed intent to bring meaningful cases, cases that matter to the investing public, rather than enforcing “foot faults,” as it has been accused of doing over the years. My own experience with FINRA...more
Nearly ten years ago, FINRA decided to update its old suitability rule, NASD Rule 2310. It had been around a long time, and while it seemed to work fine, FINRA decided to incorporate into the new amended rule – FINRA Rule...more
6/26/2019
/ Best Interest Standard ,
Books & Records ,
Broker-Dealer ,
Dismissals ,
Fiduciary Duty ,
Financial Industry Regulatory Authority (FINRA) ,
Investment Adviser ,
New Rules ,
Regulation Best Interest ,
Retail Investors ,
Securities and Exchange Commission (SEC) ,
Standard of Conduct ,
Statement of Claim ,
Suitability Rule
While I feel I have enjoyed as much success defending respondents in FINRA Enforcement matters as anyone, I am still careful to caution clients who are unwilling to consider any settlement that going toe-to-toe with FINRA at...more
Reading Reg Notice 19-17 makes me think of the legal arguments that I’ve recently read regarding whether a president can be found guilty of obstructing justice if the actions in question were taken out in the open, for...more
I apologize for all the posts this week, but I am traveling and am in a different time zone, so I am awake at hours when, ordinarily, I would be asleep, giving me time to muse. Anyway, given that, I will not test your...more
Most of the time, the cases I write about were some other lawyer’s. In some respects, it’s easier to offer comments when it isn’t my case. I can, hopefully, be more objective, less pissed off (when the result is one I...more
5/2/2019
/ Administrative Law Judge (ALJ) ,
Anti-Fraud Provisions ,
Audits ,
Conflicts of Interest ,
Disclosure Requirements ,
Form ADV ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Negligence ,
Securities and Exchange Commission (SEC) ,
Settlement Agreements
I have written before about the troubling lack of clarity regarding the tangible benefit of self-reporting rule violations to FINRA. While FINRA purports to provide some potential advantage for doing so, it is so awfully...more
Way back in 2006, NASD issued Notice to Members 06-55, which tweaked the Sanction Guidelines to allow not just the size of the firm to be taken into consideration when determining the appropriate sanctions to be meted out,...more
I am hardly saying that SEC Regulation S-P is the sexiest of regulations. I mean, has any customer is history actually read one of those exciting statement stuffers that discloses in some dense font a BD’s privacy policy?...more
4/24/2019
/ Broker-Dealer ,
Civil Monetary Penalty ,
Customer Information ,
Cybersecurity ,
Data Privacy ,
Data Protection ,
Data Security ,
Encryption ,
Enforcement Actions ,
Incident Response Plans ,
Investment Adviser ,
Notice Requirements ,
OCIE ,
Opt-Outs ,
Personally Identifiable Information ,
Policies and Procedures ,
Popular ,
Privacy Policy ,
Regulation S-P ,
Regulatory Requirements ,
Risk Alert ,
Risk Assessment ,
Securities and Exchange Commission (SEC)
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