Securities Industry Practice — Leadership and Client Resources

Ernest E. Badway advises clients on a broad range of business matters, including securities, intellectual property, employment, corporate governance, partnership disputes, contracts and litigation. He also counsels clients on the creation of broker-dealers, hedge funds and investment advisers as well as compliance and regulatory matters relating to their operations. Ernest is also the former co-chair of the firm’s White Collar Compliance & Defense Practice and has extensive experience in representing individual and corporate clients in internal investigations.

Joshua Horn represents major financial services companies in matters throughout the country. He also represents financial advisory companies, individual advisors, and counselors in FINRA examinations, enforcement and arbitrations. Joshua has represented individual brokers on disciplinary matters before FINRA and state securities commissions, and has represented companies and individuals in SEC investigations. Joshua’s practice also includes the representation of the premier merchant card processing company in various matters, including class actions, throughout the country.


Joshua and Ernest co-edit the blog Securities Compliance Sentinel, leading a team of five attorneys who provide analysis of the latest developments in securities industry news.


Recent Blog Posts

  • Why stupid clients should not ruin your business model Unlike lawyers, especially litigators, the business model of a financial advisor is not dependent upon clients being stupid. Instead, financial advisors depend on their clients making smart decisions after full disclosure and consideration after speaking with their financial advisor. So what do you do when clients make stupid decisions? In defending brokers over the years, I have seen multiple instances where clients made stupid decisions. From a legal standpoint, there is generally no duty to prevent a client from making a... More
  • Who wants to know how OBA disclosures can save your firm Over the years that I have defended broker-dealers and investment advisors, a more robust overview of outside business activity (OBA) disclosures would have gone a long way to disprove a number of claims. So where did these firms go wrong? The biggest issue that I have seen is a firm’s willingness to take the OBA of a representative or IAR at face value and not do any more due diligence. In one instance, that due diligence could have unraveled a Ponzi... More
  • It’s All In The Documentation In the near 20 years that I have been defending financial advisors against claims, many of which brought by seniors, the biggest issue that I have seen is the failure to document the file in a proper manner. Why does this matter you may ask? First and foremost, the way a file is documented tells a story about how the advisor managed the relationship. This is even more important now that there is an intense focus on suitability issues with senior... More


Calmly Navigate Client Complaints - LISTEN
Your broker client has filed a complaint. What now? In this podcast, we share best practices and dos and don’ts for successfully managing client complaints and lawsuits to help reduce risk and minimize any regulatory action.

Establishing Communication Best Practices for Brokerage Clients - LISTEN
Financial advisers who develop a few common sense, risk-avoidance techniques in their client communications may not only protect themselves from disruptive legal action but will improve their client relationships.

The ABCs of Aging Brokerage Clients - LISTEN
Working with elderly clients in the managing of their finances can be a balancing act, requiring brokers to walk a tightrope in terms of maintaining mutual confidence in the handling of accounts and guaranteeing compliance with state and federal regulatory bodies. Often the dominant concerns among broker dealers are the mental and physical well-being of older clients as well as how to react to financial decisions that are made contrary to expert advice and when to freeze accounts.

Brokers Beware: Negligent Practices Are Met With Negative Results - LISTEN
In the current regulatory climate, broker dealers need to ensure they’re engaging in best practices, even with clients with whom they have strong and long-standing relationships. Pitfalls abound. Negligence concerning trading authorization, powers of attorney and technology can potentially lead to litigation.

The Meaning of the “E” in E-Mail - LISTEN
Electronic communications—cell phone texts, web posts, tweets and, of course, e-mail—have been a game-changer for financial advisers, brokers and others in the financial industry embroiled in disputes or litigation and, as a result, facing external review of both paper and electronic company records by FINRA, the SEC or opposing counsel during discovery. Learn the real meaning of the “e” in e-mail, and the ramifications of this “e-mail equation” for brokers, advisers and other financial industry professionals.

E-Books and Guides

Private Equity and Hedge Funds: Regulatory Analysis and Structural Overview
This e-book offers a summary of the most common compliance-related issues that private equity and/or hedge funds face. This handbook is in two parts. Part I is a summary of regulatory issues affecting hedge fund formation and operation. Part II contains a “Summary of Terms” similar to one in a typical private placement memorandum that is designed as a starting point for a startup fund and as a baseline for discussion and modification.

A Guide to Every Day Risk Avoidance Techniques and How To Address a Customer Complaint
This guide was created to highlight common pitfalls, problematic client conduct, unique issues when working with seniors and simple techniques that financial advisors may use to minimize their risk of being sued, and, if sued, provide a strong defense. It also addresses critical initial steps regarding the handling of a customer complaint.

A Guide To Answer That Age-Old Question: So What Does It Mean To Know Your Customer?
This guide provides guidance on the information that should be gathered from every new client and maintained over the life of the client/adviser relationship. It contains suggestions on improving client account forms to ensure adequate “know your customer” information is gathered and maintained.