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

  • A Data Breach! You Better Check The Law Of The States In Which You Have Customers Consistent with the ongoing guidance/requirements from the SEC and FINRA, all firms must have and enforce data security policies and procedures.  Even the best policies and procedures may, however, not protect the firm in every instance.  So what do you do if there is a breach? One of the most important things to determine is what law governs.  In other words, if you have clients in all 50 states, it is possible that there are 50 different data breach laws that... More
  • When just saying “no” is a good thing In the hectic world of financial services, registered representatives and investment adviser representatives are always looking to increase their assets under management. At what cost? Are there situations where you would be better off just saying no to accepting that one additional client? In my many years of defending representatives and advisers from customer complaints, the unqualified answer is yes; there are situations when you are better off just saying no. Any good risk avoidance program will provide for the proper... More
  • Why is Anyone Surprised with the SEC Examining Firms with Previously Disciplined Advisors? On Monday, September 12, 2016, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced that a “Supervision Initiative” will take place across the country. OCIE staff will conduct focused RIA examinations of firms employing or contracting with supervised persons, who have a disciplinary history.  OCIE plans to evaluate the effectiveness of RIA compliance programs, supervisory oversight practices, and disclosures to clients and prospective clients, concentrating on the potential risk disclosures arising from financial arrangements initiated by supervised persons with a disciplinary history.  OCIE’s justification for this targeted examination... More
  • Fox Rothschild’s National Survey on Restrictive Covenants Released Although the Broker Protocol has alleviated some concerns, many firms still find themselves wrestling with the vagaries of restrictive covenants when dealing with their employees.  Fox Rothschild has produced this revised and updated 50-state survey as a quick reference for in-house counsel and human resource professionals to access details on the variations by state in the laws of restrictive covenants in the employment context. As always, we are available to discuss individual circumstances.... More
  • Do you really want to hire that broker with a checkered past That is the question that the SEC has essentially posed for registered investment advisers in a National Exam Program Risk Alert. In doing so, the SEC has stated that it will be “examining compliance oversight and controls of registered investment advisers that have employed or employ individuals with a history of disciplinary events . . . .” The SEC will essentially be examining the investment advisers business and compliance practices, particularly focused on higher risk individuals. Does this mean that you... More
  • The More Things Change, The More They Stay The Same…. Given the start of the NFL season and the post-Labor Day last leg of the presidential campaign season, it reminded me of a blog entry that I posted in August 2012, regarding picking a winner for the then presidential race based upon the conference of the team that won the Super Bowl in the year of the election.  I have re-published the blog below for your amusement. I blogged on this topic because it involved 3 things everyone in the securities... More
  • Is this the first shot in the SEC’s war against social media?   The SEC has repeatedly included issues around social media in its annual exam priorities for investment advisers. With the SEC’s recent release of a final rule on the subject, the SEC has taken that “exam priority” to the next level. Under this new rule, investment advisers will have to complete an additional component to their annual Form ADV filed with the SEC. In doing so, investment advisers will have to disclose their addresses for Twitter, Facebook and LinkedIn. So what’s the... More
  • Who wants to chair a FINRA arbitration Every time that I start a FINRA arbitration, I find myself having the same internal debate; did we pick the right person to serve as the arbitration chair. Unfortunately, you will not know the answer to that question until after your arbitration begins, or, more likely, after the award is issued. FINRA has proposed a rule change to open up the filed for chair arbitrators. Under the proposed rule, attorneys can serve as public arbitrator chair with less experience than they... More
  • Don’t argue; the client is always right even when they are not Over the years that I have defended broker-dealers and investment advisors on customer-initiated claims, I have seen many things that would make any compliance officer cringe. One spine tingling (not in the good way) type of conduct is when an advisor engages his/her client when the client makes an informal complaint, instead of routing the complaint to compliance/supervision. So why is engagement against the rules of engagement? The most important reason is that engagement (aka arguing) may only make a simple... More
  • Why treating customer complaint with therapeutic neglect always fails When faced with a customer complaining through a letter or email, it is human nature to try to appease the customer with a conciliatory response or no response at all. I have seen this “human nature” all too often when defending brokers and advisor from customer complaints. In almost all instances, the complaining customer now claims that the conciliatory comment or non-response is the functional equivalent of an admission by the broker/advisor that he/she did something wrong. In turn, the broker... More