News & Analysis as of

Financial Industry Regulatory Authority (FINRA) Retail Investors

Mayer Brown Free Writings + Perspectives

SEC Settles Reg BI Case Against California Broker-Dealer

On July 31, 2024, the Securities and Exchange Commission (“SEC”) announced that it agreed to settle allegations that a California-based broker-dealer sold in excess of $13 million in “L bonds,” a speculative, unrated debt...more

Troutman Pepper

FINRA’s First Disciplinary Action Targeting Firm’s Use of Social Media Influencers

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The Financial Industry Regulatory Authority’s (FINRA) Enforcement Division recently announced its first settlement involving a firm’s supervision of social media influencers. The respondent, M1 Finance LLC (M1), is a...more

Goodwin

FINRA Proposes to Add ‘Knowledgeable Employees’ to Category of Persons Who May Receive Projections and Targeted Returns Under Rule...

Goodwin on

This amendment builds on FINRA’s recent willingness to relax the prohibition on the use of projections and targeted returns in the marketing materials broker-dealers deliver to institutional investors and qualified...more

WilmerHale

FINRA’s 2024 Annual Regulatory Oversight Report: What Broker-Dealers Need to Know

WilmerHale on

On January 9, 2024, the Financial Industry Regulatory Authority published its 2024 FINRA Annual Regulatory Oversight Report. Previously titled Report on FINRA’s Examination and Risk Monitoring Program, the Report is released...more

Oberheiden P.C.

What Should You Expect, Do, and NOT Do During a FINRA Investigation?

Oberheiden P.C. on

Financial Industry Regulatory Authority (FINRA) investigations present significant risks for broker-dealers. Not only can FINRA take enforcement action—including the imposition of penalties and barring broker-dealers from the...more

Robins Kaplan LLP

Should you take financial advice from Magnum P.I.?

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Unless you rely solely on streaming services, at some point in recent years, you have likely seen Tom Selleck pitching reverse mortgages as a retirement strategy. Is that a product for you? Or your parents? This article won’t...more

Mayer Brown Free Writings + Perspectives

FINRA Releases 2023 Report on Its Examination and Risk Monitoring Program

On January 10, 2023, the Financial Industry Regulatory Authority, Inc. (“FINRA”) released its 2023 Report on FINRA’s Examination and Risk Monitoring Program (the “Report), available at:  2023 Report on FINRA’s Examination and...more

Dechert LLP

FINRA Issues Targeted Exam Letter Regarding Crypto Asset Retail Communications

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The Financial Industry Regulatory Authority announced, on November 14, 2022, a targeted exam focusing on broker-dealers’ practices for communications with retail investors regarding Crypto Assets (as defined below)....more

Eversheds Sutherland (US) LLP

New FINRA sweep targets crypto marketing

As might be expected, FINRA appears to be aligning itself with the SEC in its assertion of jurisdiction over investments that may not, at the end of the day, be deemed securities. ...more

Goodwin

BD and IA Conflicts of Interest: SEC Staff Says Don’t Set It (Them) and Forget It (Them)

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​​​​​​​SEC staff recently served up a juicy staff bulletin covering the standards of conduct for broker-dealer and investment adviser conflicts of interest. The staff bulletin includes 13 Q&As categorized into five different...more

Dorsey & Whitney LLP

Injecting Transparency & Competition into Equity Markets

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The Commission’s rule writing calendar may be about to have a meltdown. The agency is considering a number of significant rule writing-proposals covering important areas. A number of those proposals are controversial,...more

BCLP

FINRA Requests Information from Member Firms Related to the Sale of Complex Products by May 9, 2022

BCLP on

FINRA’s Request for Comments - Based on concerns regarding complex products as expressed in Regulatory Notice 22-08, FINRA is seeking comments from member firms by May 9, 2022, including, how firms identify complex...more

Goodwin

Regulation Best Interest and Form CRS: Spotlight on FINRA’s 2022 Exam and Risk Monitoring Program Report

Goodwin on

This is the first in a series of alerts discussing topics covered by FINRA in its 2022 Examination and Risk Monitoring Program Report (the “Report”). Here we take a look at Regulation Best Interest (“Reg. BI”) and Form CRS,...more

Burr & Forman

FINRA Targeted Exam Letter on Options Accounts

Burr & Forman on

The Financial Industry Regulatory Authority (“FINRA”) recently kicked off a “sweep” examination with its August 2021 Targeted Exam Letter on “practices and controls related to the opening of options accounts and related...more

Mayer Brown Free Writings + Perspectives

FINRA Expands Scope of Filing Requirements for Private Placements

In Regulatory Notice 21-26 (July 15, 2021), FINRA amended the filing requirements of Rules 5122 and 5123 to require members to file with FINRA any “retail communications,” as defined in FINRA Rule 2210, that promote or...more

Kilpatrick

New FINRA Filing Requirements for Private Placement Recommendations; More Private Offering Regulatory Restrictions Likely

Kilpatrick on

FINRA Rules - On July 15, 2021, FINRA announced that it has updated its rules regarding the offering of private placement securities to expand the existing requirement that each broker-dealer that issues and/or sells a...more

Kilpatrick

Insights into the States' 2021 BD Examination, Enforcement Priorities

Kilpatrick on

Putting Teeth on Reg BI (to take a bite out of complex products sales), Protecting Seniors (from romance scams, affinity frauds, and rogue POAs), Scrutinizing Bank-Based Reps, DBAs, and Remote Supervision, and the beginning...more

Lowenstein Sandler LLP

Let the Game(Stop) Begin—Unless You Are A Retail Investor

Lowenstein Sandler LLP on

Gone are the days when you had to walk into a physical branch to open a brokerage account. Each trade used to cost money, and account minimums were high. Not anymore. Now any American with internet access and a bank account...more

Tonkon Torp LLP

SEC Division Of Examinations Announces 2021 Priorities

Tonkon Torp LLP on

On March 3, 2021, the Security and Exchange Commission’s Division of Examinations (formerly the Office of Compliance Inspections and Examinations, now either “the Division” or “EXAMS”) announced its fiscal year 2021...more

Latham & Watkins LLP

FINRA Issues Proposal to Mandate Filing of All Retail Communications Regarding Certain Private Placements

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In setting forth its rationale, FINRA observed that private placement retail communications reviewed by AdReg have “revealed significant and pervasive” violations of FINRA Rule 2210. On October 28, 2020, the Financial...more

King & Spalding

FINRA Proposes Expansion of Safe Harbor in Cases of Suspected Financial Exploitation

King & Spalding on

Thwarting the financial exploitation of seniors and other vulnerable investors has been an increasing focus of several financial regulators in recent years, including the Financial Industry Regulatory Authority (“FINRA”). In...more

Faegre Drinker Biddle & Reath LLP

Best Interest Standard of Care for Advisors #31

Regulation Best Interest: Best Interest and Suitability—How They Differ (Part 2) - Regulation Best Interest (Reg BI) imposes a “best interest” standard of care on broker-dealers for their recommendations of securities and...more

Latham & Watkins LLP

FINRA Issues Guidance on Retail Communications in Private Placements

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The guidance highlights certain issues identified by FINRA regarding member firm communications to retail investors in private placement offerings. On July 1, 2020, the Financial Industry Regulatory Authority (FINRA)...more

Vedder Price

Form CRS Update – OCIE Risk Alert on Initial Examinations

Vedder Price on

On April 7, 2020, the Securities and Exchange Commission’s (the “SEC” or the “Staff”) Office of Compliance Inspections and Examinations (“OCIE”) issued a Risk Alert to provide SEC-registered broker-dealers and investment...more

Epstein Becker & Green

SEC and FINRA Provide Guidance on Regulation Best Interest

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Recently, the U.S. Securities and Exchange Commission’s (“SEC”) Office of Compliance Inspections and Examinations (“OCIE”) issued a Risk Alert to provide broker-dealers with guidance on examinations regarding regulation Best...more

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