Header graphic for print
Securities Compliance Sentinel Analysis of cutting-edge securities industry issues

Category Archives: Internal Investigations

Subscribe to Internal Investigations RSS Feed

Who wants to know some pre and post data breach considerations

Posted in Books and Records, Cyber-Security, Financial Industry Trends, Internal Investigations

In a recent blog by Chris Pogue (a digital forensic expert), he highlighted a handful of considerations for firms both pre and post data breach. After all, the issue is not really whether you will suffer a breach, but when and how bad will it be. Those considerations bear repeating, and include the following: Retention… Continue Reading

What To Expect In 2014 From The SEC’s Enforcement Division

Posted in Broker-Dealer Regulation, Hedge and Private Equity Funds, Insider Trading, Internal Investigations, Investment Adviser Regulation, SEC Compliance, SEC Enforcement, SEC Organization, SEC Structure, Whistleblowers

Now that 2014 is here, it is a good idea to understand what the Enforcement Division might focus on this year.  In a recent article that appeared in the BNA, David Marder, a partner with Robins, Kaplan, Miller & Ciresi identified fifteen things to expect in the coming year.  The fifteen things he noted to… Continue Reading

So Who Is My Lawyer Anyway?

Posted in CFTC Enforcement, FINRA Enforcement, Internal Investigations, Law Firms and Lawyers

A firm faced with a regulatory investigation should hire outside counsel to bring objective analysis to the situation. Although it may seem simple, the question that must first be addressed is who the lawyer represents. If the firm itself is the subject of the inquiry, then the firm needs representation. However, that same lawyer should… Continue Reading

What Is The Secret For Supervisors When Dealing With Account Opening Documents?

Posted in Broker-Dealer Regulation, Internal Investigations, Public Customer Arbitrations, Registered Representatives

In two recent posts, I highlighted the problems with incomplete account opening documents and those signed in blank.  Now that you know the problem, the important question to ask is how do you prevent the problem in the first place. A robust supervision program and a culture of compliance are a start, but not the… Continue Reading

Your Internal Investigation May Not Be Safe Anymore

Posted in Internal Investigations, SEC Enforcement

The SEC has been much more aggressive in policing a company’s internal investigations. There has been a direct causal relationship to the SEC’s increased use of whistleblowers and its focus on a companies’ use of internal investigations.  We have seen that the SEC probably knows more about the matter before it begins its official inquiry or contacts the… Continue Reading

You Need a “Shadow” If You Want to be a RIA Today

Posted in Compliance and Supervision, Internal Investigations, Investment Adviser Regulation, SEC Enforcement

The SEC, recently, sued a private equity fund adviser for, among other things, allegedly violating Investment Advisers Act of 1940 Rule 206(4)-7, for failing to have procedures requiring verification of client signatures and instructions by a second person.  See http://www.sec.gov/litigation/complaints/2012/comp-pr2012-244.pdf. The SEC stated that the RIA and its principal made certain unauthorized transactions and used… Continue Reading

Do You Want To Know A Secret About Account Opening Documents.

Posted in Broker-Dealer Regulation, Internal Investigations, Public Customer Arbitrations, Registered Representatives

Never, under any circumstances, should you have your client sign an account opening document in blank, for you to complete at some later time.  To most of you, this is not much of a secret, but I have seen it enough in my practice of defending brokers to know that it happens all too often.… Continue Reading

Who Wants To Learn A Way To Insulate Themselves From Liability.

Posted in Arbitration, Compliance and Supervision, Corporate Governance, Internal Investigations, Public Customer Arbitrations, Registered Representatives

In our hyper-fast world, financial advisors, like many in the service sector, have become lazy.  Let me be clear, I think financial advisors are working harder than ever to service their clients in these challenging times for which they should be commended. The laziness to which I refer is that I see financial advisors taking… Continue Reading

Game Changing Off-Label Marketing Decision Has Implications for Related Securities Lawsuits

Posted in Compliance and Supervision, Corporate Governance, Federal and State Criminal Activities, Internal Investigations, Securities Class Actions, Securities Litigation

The Second Circuit ruled that the First Amendment trumps the federal government’s enforcement off-label marketing prohibitions. The decision could change the face of pharmaceutical compliance and limit criminal, regulatory, and civil exposure to government and private plaintiffs.