Blog – Securities Compliance Sentinel

The highly regulated securities and financial industry has a host of complex problems—and financial institutions often find themselves on the receiving end of audits, investigations and other compliance issues. Our team of seasoned securities attorneys share their knowledge and experience to address cutting edge industry issues. Join them in their exploration of this increasingly complex area.

Recent Blog Posts

  • FINRA Notice to Members; Enhanced Confirmation Disclosures FINRA has recently issued a notice to members regarding to the enhancement of confirmation disclosures.  Here is a link to that notice.    ... More
  • Ransomware; don’t be held hostage Ransomware is an ever increasing problem.  To learn more about it and to avoid its impact, check out this blog.... More
  • The Tale of the Recidivist Broker The CEO of FINRA recently announced that FINRA plans to provide firms with additional resources to deal with recidivist brokers. So what does this mean? For years, FINRA’s exam priorities have focused on, among other things, brokers who are repeat violators of FINRA rules. FINRA has made this a priority as a way to weed out brokers who do not deserve to be in the industry because they are likely causing more harm than good. FINRA is effectively asking the firms to... More
  • Rulemaking Through Enforcement; What’s Next? FINRA has rulemaking authority.  Nevertheless, the trend would appear to be that FINRA is making its rules through the enforcement process.  Read this blog for insightful thoughts on this issue.... More
  • The Supreme Court Limits The SEC’s Ability To Seek Disgorgement The Supreme Court recently ruled that a five year statute of limitations applies to when the SEC seeks disgorgement.  To learn more, read this alert.... More
  • What Are You Doing About Outside Business Disclosures? FINRA is currently reviewing its rules regarding outside business activities and private securities transactions. From time to time, FINRA reviews its rules and application of those rules to see if anything needs to be tweaked. Is there any significance to FINRA looking at these particular rules? From my experience, some bad brokers have used the outside business activity disclosure process as the tool to cover their tracks while engaging in activity that the firm would otherwise want to know about. In... More
  • Cyber Attacks Merit SEC Risk Assessment Intervention The recent cyberattacks across the globe have caused the  SEC’s Office of Compliance Inspections and Examinations (“OCIE”) to issue an alert and highlight certain best practices for firms to handle these ransomware attacks. The OCIE staff based this guidance on its review of various firms, concluding that these firms should perform a cyber-risk assessment; conduct penetration and vulnerability tests; and ensure software maintenance such as updates and software patches if applicable.  The OCIE staff found that many firms had deficiencies.  Further, according to the OCIE staff, firms should develop contingency plans... More
  • So You Want To Change Firms — Part II So you really want to change firms.  Do you have a restrictive covenant or a non-compete?  If so, your transition may be a little more complicated.  To learn what restrictions may apply to you, check out our 50-state survey on restrictive covenants. ... More
  • So You Want To Change Firms   One certainty in the brokerage world is that registered representatives often switch from one member firm to another. There is nothing wrong with the switch, but there is a word of caution to be shared. Before you leave, make sure you only have in your possession, if anything, only those things that the firm you are leaving lets you keep. If you take something you are not allowed to have, you can rest assured that your former employer will come looking... More
  • You Better Watch Your Suitability Determinations The SEC recently announced that it charged a former broker with knowingly or recklessly trading unsuitable investment products for five customers and taking $170,000 for one of those customers. These charges follow a prior SEC Investor Alert warning about excessive trading and churning as well as another one focused on the risks associated with exchange-traded notes. The broker must not have read those two alerts. According to the SEC, the broker enriched himself by systematically disregarding client investor profiles. He repeatedly... More