Blog – Securities Compliance Sentinel

https://securitiescompliancesentinel.foxrothschild.com/

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’s Further Guidance On Seniors Nearly a year ago, FINRA adopted Rule 2165 (Financial Exploitation of Specified Adults) and amended Rule 4512 (Customer Account Information). This new rule and amended rule were ways to address the myriad of issues dealing with senior clients. With nearly a year gone by, FINRA has now published responses to frequently asked questions involving Rules 2165 and 4512. The responses to the FAQs are broken down into the following categories. Placement of temporary holds. Extensions of temporary holds. Trusted contact. Disclosure. For anyone who has any... More
  • Takeaways From The SEC Investor Bulletin On Wrap Fee The SEC recently put out an Investor Bulletin on wrap fees. Although this guidance is steered toward consumers, there are lessons to be learned by firms who offer such programs. The SEC specifically posed the question of what does the fee cover. Included in that list of possibilities are: Investment advice. Brokerage costs. 24752961 – grunge rubber stamp with text disclosure,vector illustration Administrative expenses. Other fees and expenses like those associated with mutual funds. Third party service provider costs and trading away. So what can a firm take... More
  • What FINRA Found in its Examinations FINRA recently issued a report regarding its examination findings. FINRA issued this report so that firms can gain insight from the work of FINRA’s examination of other firms. Among the FINRA’s findings are the following areas that need additional attention: Cybersecurity, including access management, risk assessments, vendor management, branch office security, segregation on internal duties and data loss prevention. Outside business activities and private securities transactions, including failure to provide notice to firms, notice reviews and post private securities transaction approval conduct. Anti-money laundering... More
  • What’s The Deal With Branch Office Inspections? In Notice to Members 17-38, FINRA has put out for comment a change to Rule 3110 that would allow the remote inspection of certain “qualifying offices” as that term is defined by FINRA. In its Notice to Members, FINRA highlighted the point that technology and a changing industry mandate reconsideration of requiring mandatory, in-person inspections. A “qualified office” is an office that meets the following conditions: A location where there are no more than three associated persons that conduct business for the... More
  • So Who Wants To Lie On Their U-4   The SEC recently upheld a statutory disqualification that FINRA imposed where the representative filed a false U-4 and falsely answered compliance questionnaires. It appears as though the registered representative failed to disclose tax liens and a bankruptcy on his U-4. So is statutory disqualification the proper punishment for this misdeed. According to FINRA and the SEC, the answer is a resounding yes and, unfortunately for the registered representative, this makes sense. After all, the U-4 is the lynchpin of what must... More
  • So The SEC Is Now Focused On Retail Investors The SEC recently announced an enforcement initiative that will target retail investor harm. The agency’s task force will use data analytics to find widespread problems regarding fee disclosures and unsuitable investment recommendations. In addition to data analytics, the SEC will rely upon tips, complaints and referrals that come into the SEC. This heightened analysis of the retail investor market should be a wake-up call to firms who service the retail investor space. There are a few questions that you should be... More
  • FINRA Changes To Arbitration Procedure FINRA is considering a number of changes to its arbitration procedure.  For a good discussion on the subject, see this article.... More
  • So You Think You Have No Cybersecurity Issues Recent exams have shown that cybersecurity weaknesses are a real issue for the industry.  This article from the Investment News provides the detail.    ... More
  • SEC Still Has Lawyers in its Cross-Hairs It is almost axiomatic that the SEC “enjoys” bringing enforcement actions against lawyers.  The SEC believes that lawyers have a special duty to protect and police the securities markets, and, when a lawyer fails, the SEC is right there to pounce. In fact, the SEC fined and barred an attorney from practicing before the Commission because the attorney failed to conduct proper due diligence when acting as underwriter’s counsel in misleading municipal bond offerings.  See https://www.sec.gov/litigation/admin/2017/33-10335.pdf.  The SEC claimed that the lawyer prepared erroneous documents regarding on-going disclosure obligations.... More
  • Ernie Badway to Co-Host Webinar on New Developments in AML and Training Requirements Ernie Badway is scheduled to co-host a webinar discussion on new developments in AML and training requirements on Wednesday, September 13, 2017 at 1:00 p.m.  See http://mailchi.mp/e5dd1d2898b8/webinar-sample.  Details are below: New Developments in AML and Training Requirements New Developments in AML and Training Requirements  Date: Wednesday, September 13, 2017  Time: 1:00pm ET / 12:00pm CT / 11:00am MT / 10:00am PT / 9:00am AT Webinar Description:  With numerous high profile incidents reported on a regular basis, it is little wonder that FINRA, FinCEN and the SEC continue... More