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Category Archives: Conflicts of Interest

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What do you need to know about the latest FINRA sweep exam

Posted in Books and Records, Broker-Dealer Regulation, Conflicts of Interest, FINRA Compliance, FINRA Enforcement

FINRA recently sent out targeted exam letters focused compensation practices. The intent of this targeted exam is to assess how firms identify, mitigate and manage conflicts of interest when it comes to compensation paid to registered representatives. This limited examination is designed for information gathering purposes and to determine best practices around the sale of… Continue Reading

So who really thinks the SEC is not focused on elder investors

Posted in Breach of Fiduciary Duty, Broker-Dealer Regulation, Compliance and Supervision, Conflicts of Interest, FINRA Compliance, FINRA Enforcement, SEC Compliance, SEC Enforcement

If there is any question that the SEC is focused on elder investor issues, look no further than its recent program announcement. The SEC initiated a program designed to examine retirement planning guidance. Under this program, the SEC intends to explore whether the compensation advisers receive presents a conflict of interests and, if so, how… Continue Reading

What The Heck Is A Senior Designation

Posted in Broker-Dealer Regulation, Compliance and Supervision, Conflicts of Interest, FINRA Compliance, FINRA Enforcement

That is one of the questions FINRA sought to answer in its recent National Seminar Investor Initiative. FINRA confirmed that many representatives use such designations, but some of them are bogus or no better than a certificate you find as a prize in a cereal box. The problem is that some representatives use these bogus… Continue Reading

What Are You Doing About The New Supervision Rules

Posted in Broker-Dealer Regulation, Compliance and Supervision, Conflicts of Interest, FINRA Compliance, FINRA Enforcement, Registered Representatives

FINRA noted in its exam priorities that it will be focusing on firms’ compliance with the new supervision rules (FINRA Rules 3110, 3120, 3150 and 3170).  These rules became effective on December 1, 2014. Now that two months have passed since their effective date, firms should have taken the changes into account in their written… Continue Reading

Who Wants To Speak With Me, Oh No

Posted in Breach of Fiduciary Duty, Compliance and Supervision, Conflicts of Interest, Registered Representatives

Anyone in a service industry has had that dreaded feeling.  You see your email or caller identification and realize it is “that” client trying to reach you.  The client I reference is that extremely difficult client that we all have. The natural inclination for many of us is to not take the call or respond… Continue Reading

My Client Has Dementia, Now What

Posted in Compliance and Supervision, Conflicts of Interest, FINRA Compliance, Investment Adviser Regulation

What do you do when your elderly client begins to make bizarre withdrawals?  Is there something wrong when your elderly client starts transferring funds to finance a Nigerian soccer teams?  What if a long lost relative comes on the scene and starts influencing the investments and cash withdrawals of an elderly client?  Unfortunately, many financial… Continue Reading

Look Before You Tweet

Posted in Compliance and Supervision, Conflicts of Interest, FINRA Compliance, FINRA Enforcement, Registered Representatives, Social Media

FINRA recently sanction a registered representative for tweets made some time ago.  The offending tweets referenced a stock that he did not disclose that he owned and were otherwise biased and not backed up by facts.  The registered representative was fined $15,000 and given a ten day suspension.  In the larger scheme of things, a… Continue Reading

CONFLICT OF INTEREST BEST PRACTICES

Posted in Conflicts of Interest

FINRA published a report on best practices used by broker-dealers to manage conflicts of interest.  See http://www.finra.org/web/groups/industry/@ip/@reg/@guide/documents/industry/p359971.pd?utm_source=MM&utm_medium=email&utm_campaign=NewsRelease_Conflict_101413_FINAL. The report was based on responses to a sweep letter sent out by FINRA in July 2012, as well as meeting firm representatives and a follow-up questionnaire.  The report focuses on three main areas: broker-dealers’ enterprise-level frameworks to… Continue Reading

Do You Really Want To Be A Dual Registrant

Posted in Broker-Dealer Regulation, Compliance and Supervision, Conflicts of Interest, FINRA Compliance, Registered Representatives, SEC Compliance, SEC Enforcement

One of the priorities of the SEC National Examination Program is dual registrants; entities that provide both brokerage and investment advisory services.  The focus of the program on dual registrants begs the question why a firm would want to be one.  The answer to that question should be an obvious.  Being a dual registrant allows… Continue Reading

What To Make Out Of FINRA’s Proposed Rule On Bonus Disclosures

Posted in Broker-Dealer Regulation, Conflicts of Interest, FINRA Compliance, SEC Compliance

Bonuses and other forms of compensation are frequently used by one firm to attract talent away from another firm.  FINRA has now proposed a rule that would require brokers who receive in excess of $100,000 to disclose that payment to their customers.  Does this make any sense?  FINRA’s rationale for the rule is that it… Continue Reading

Should You Breath Easy Because FINRA Enforcement Actions And Fines Decreased In 2013

Posted in Broker-Dealer Regulation, Conflicts of Interest, FINRA Compliance

The Sutherland Asbill firm recently released its report regarding FINRA enforcement actions. In all, the report reflects that enforcement actions and fines decreased over the past year.  So what does this all mean? According to the firm, this could be a reflection of the larger financial crisis cases having worked their way through the system.… Continue Reading

What Does A Fiduciary Duty Have to Do with It?

Posted in Broker-Dealer Regulation, Conflicts of Interest, FINRA Compliance, SEC Compliance

As the SEC dawdles and contemplates whether there should be a uniform fiduciary duty, Robert Ketchum, chairman and chief executive of FINRA, has recently laid down the gauntlet when he called for a cultural shift to where broker-dealers act in the best interests of their clients. Acting in the best interests of your clients is… Continue Reading

CONFLICTS OF INTEREST MAJOR ISSUE FOR RIAS AND SEC

Posted in Conflicts of Interest, Investment Adviser Regulation, SEC Enforcement

  While the overwhelming majority of registered investment advisers are operating in the best interest of their clients in a very complex business, others do not, according to the SEC.   These bad actors usually are either liars, cheaters, reckless or involved in conflicts of interest.  The former usually face the wrath of regulators sooner… Continue Reading