With the exception of those of you who have literally been asleep for the last few years, you are well-versed in the attention FINRA and the SEC are giving to issues surrounding elder investors. Among other things, there is a real focus on elder abuse. Some commentators believe that all of this attention may inevitably… Continue Reading
Other than the non-defined “culture”, FINRA’s 2016 exam priorities are also focused on supervision and risk management. At least these categories are a bit more defined so that you are not left guessing what FINRA means. Under these broad topics, FINRA is focused on four primary areas, which include: Management of conflicts of interest, including… Continue Reading
When faced with a customer complaint, the key is what you do next. In the last of our podcast series, Ernie Badway and I discussed what firms should do when confronted with a customer complaint. Enjoy.
FINRA released its 2016 Exam Priorities yesterday, and its top priority ventures into a very grey area. FINRA has announced that beginning this year, it will formalize a process of assessing “firm culture”. In doing so, FINRA appears to be focused primarily on ethics and conflicts of interest and insists that it “does not seek… Continue Reading
As you may know, FINRA, last April, launched a senior helpline to address issues pertaining to senior investors. According to recent reports, FINRA received calls on many different issues such as how to read an account statement up fraud targeted to senior investors. FINRA has reported that some of these calls resulted in follow-up calls… Continue Reading
The SEC is conducting an exam sweep that focuses on retirement advice being given to clients of investment advisors and broker-dealers. Some commentators see this as a turf war between the SEC and the Department of Labor (DOL) because the sweep focuses on things that may come under the DOL’s jurisdiction. Whether the exam… Continue Reading
As the New Year dawns, financial firms should only expect greater and more sophisticated attacks. After all, not only do you house personal identifying information, you also have access to client funds. In a recent Investments News round-table, this threat was considered in more detail. There were a number of concerns noted, which include: Email.… Continue Reading
Most people say that New Year resolutions are only as good as the paper on which they are written. Notwithstanding that ringing endorsement, I will give it a shot. Here are some things that you should be resolved to doing in the New Year: Read the SEC and FINRA exam priority letters that each issue… Continue Reading
As of December 12, 2015, FINRA will release Form U-5s within three business days of a member firm’s submission, instead of the fifteen days currently provided for under Rule 8312. The current version of the rule was meant to provide the departing registered representative ample opportunity to comment on the disclosure either though a Form… Continue Reading
Ernie Badway and I have prepared a series of podcasts dealing with the relationships between broker-dealer, investment advisors and their customers. Here is the third part of that series focused on risk avoidance techniques. Here is the link: https://soundcloud.com/fox-rothschild-llp/securities-best-practices.
Ernie Badway and I have prepared a series of podcasts addressing risk avoidance issues for broker-dealers and investment advisors. The latest in the series addressing issues surrounding elder clients. We hope you’ll take a listen.
Any data security program has to have three critical components. Those key components are the following: First; risk assessment. You must test, retest, and retest your systems (including your staff) for gaps and vulnerabilities. Hackers are very sophisticated. Do what you can to stay ahead of the curve on understanding the risks to your systems… Continue Reading
The Securities and Exchange Commission released its 2015 Annual Report on its Whistleblower Program this week and announced another rise in the number of whistleblower tips that it received. The SEC reported receiving 3,923 tips during its 2015 Fiscal Year, which is up from 3,620 in 2014 (as we previously reported), and up over 30% from… Continue Reading
No one likes being a victim, let alone being a victim twice. But that is what you may face if you have a data breach. If your firm had a vulnerability that a hacker exposed, your regulator may come after you regardless if there is any client harm. After all, your system had a gap… Continue Reading
One area of focus for FINRA has been on recidivist registered representatives. A recidivist is an associated person who has repeated rule violations or customer complaints of a specific nature. FINRA has used a risk-based approach in order to be proactive to identify the bad behavior that these undesirable registered representatives tend to display. In… Continue Reading
Ernie Badway and I have prepared a series of podcasts that highlights client-issues and risk avoidance techniques for broker-dealers and investment advisors. We hope you’ll take a listen.
The SEC and FINRA have made it very clear that they are focused on senior customers and elder abuse. Granted, firms must be focused on the elder customers, but, at the same time, must also focus on the fact that many advisors are included in the graying generation. What are firms to do about that?… Continue Reading
The SEC recently issued an investor bulletin regarding one of our favorite topics; data security of customer accounts. The primary areas of the SEC’s focus were: Have a strong password, keep it secure and change it often. Use a two-step verification process if the firm offers it. Use different passwords for different on-line accounts. Avoid… Continue Reading
Andrew Donohue, SEC Chief of Staff, recently commented on what a person needs in order to be a competent CCO; he identified nine things. The overarching theme from this list is experience. According to Donahue, in no particular order, a CCO must: Have a “first hand knowledge” of the regulatory environment. Have a detailed understanding… Continue Reading
It is no secret that some firms try to use the “free lunch” seminars to attract elder clients to high-fee investment products. The SEC recently noted that it will be, through the examination process, targeting firms who frequently sponsor these lunches that target the elderly as new clients. Although the SEC noted that there is… Continue Reading
In a recent blog, Michael Volkov noted five ingredients to ensure a culture of compliance. Why should you care? It is quite simple, firms that do not promote a culture of compliance are bound to find themselves face to face with their regulator, and not at a holiday party sharing cocktail weenies. So what are… Continue Reading
Last month, Sutherland Asbill & Brennan published data revealing FINRA’s first-half fine total for 2015. The good news: FINRA’s $37.5 million in first-half 2015 fines is down from $42.4 million for the same time period last year. Projected for the full year, a total of $75 million for 2015 fines imposed by FINRA would be a… Continue Reading
As recently reported in the Investment News, the North American Securities Administration Association (NASSA) reported on the results of state coordinated examinations. The relative good news was that there were 30% fewer deficiencies from 2013 to 2015. These examinations revealed, however, five areas of particular concern for state based investment advisors. These issues are: Not… Continue Reading
In first of a series of articles on FINRA enforcement and the disciplinary process, Scott Matasar gave some sage advice on dealing with an 8210 request. The biggest take away is that ignoring the request or providing a half-assed response is not the way to make friends at FINRA. First, ignoring an 8210 request will… Continue Reading