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
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
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
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
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 ,
Compliance ,
Department of Justice (DOJ) ,
Documentation ,
Due Diligence ,
Enforcement Actions ,
Ethics ,
Financial Industry Regulatory Authority (FINRA) ,
Investment Adviser ,
Securities and Exchange Commission (SEC) ,
Settlement ,
Supervision
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
“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
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 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