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

  • 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
  • Fox’s Mark Silow, Joshua Horn and Cannabis Practice Profiled We strongly encourage you to read the article profiling our firm and partners, Mark Silow (also our firm Chairman) and Joshua Horn, on Fox’s  Cannabis Practice Group.  See https://bol.bna.com/why-fox-rothschild-is-still-banking-on-its-cannabis-practice/.  No, sorry, Fox does not offer free samples, but, if you are interested in this emerging area, Josh is available to discuss.... More
  • When Independent Commentary Isn’t   The SEC has recently issued an Investor Alert regarding commentary provided about investors from what appear to be independent sources. It turns out, many of those independent sources are not independent at all. Instead, they are paid shills. The SEC has instituted enforcement actions against such companies for generating deceptive articles on investment websites. Among other things, these companies: Failed to disclose that they received payment even though companies had paid them directly or indirectly. Used different pseudonyms to publish multiple articles the... More
  • FINRA Is Sanctioning What   In Notice to Members 17-13, FINRA announced changes to its sanction guidelines. In other words, FINRA has listed its new top hits that it is pursuing. Two items bear particular attention. First, FINRA has introduced a “new principal consideration that examines whether a respondent has exercised undue influence over a customer.” This guideline reinforces FINRA heightened focus on senior investors and those who may be otherwise vulnerable, such as those with diminished capacity. Second, FINRA has introduced a “guideline related to borrowing... More
  • Pastor Fraud, Say It Isn’t So The SEC recently announced fraud charges, and sought an emergency asset freeze against a pastor who was accused of exploiting church members, retirees, and laid-off autoworkers. Apparently, he mislead these people by purportedly selling them on a successful real estate business. The pastor cloaked his fraud in faith-based rhetoric, including references to the bible and suggestions that he was praying for investors. As a result, his defrauded investors thought that he was more trustworthy than a banker, investing nearly $7 million... More
  • So I Guess It Is All About The Seniors Contrary to what the title may suggest, I am not referring to students who are about to graduate from high school or college. Instead, this post is about that group of our society who all too often (based upon my years of defending broker-dealers) are claimants in FINRA arbitrations; senior investors. As part of its ongoing effort to protect seniors, FINRA recently introduced Rule 2165 and amended Rule 4512. Both rules reflect a growing trend to provide greater protection to seniors. Rule... More
  • The SEC Reluctantly Vacates Collateral Bars After Court Loss One of the outstanding issues relating to the Dodd-Frank Act was the SEC’s use of statutory power to regulate conduct that occurred prior to its enactment in July 2010. The United States Court of Appeals for the District of Columbia recently decided that the SEC did not have the power to impose collateral bars on conduct pre-July 2010. Consequently, the SEC has now determined it will allow those respondents and/or defendants, who are subject to these collateral bars, to apply to... More