In a recent Acceptance, Waiver and Consent (“AWC”) a broker dealer was censured and fined for, among other things, the failure to conduct an adequate pre-hire investigation of a registered representative. The importance of this AWC is that it may signal FINRA’s mindset for what firms must do under Rule 3110(e).

Under Rule 3110(e), FINRA

Brokers like anyone else enjoy making money the old fashioned way  . . . . by inheriting it.  Although everyone wants to inherit business, a recent Investment News article highlighted the pitfalls associated with agreements to acquire the business of a retiring broker. confusion.jpg

Indeed, intra-industry disputes, such as those involving the acquisition of a book

As a result of a couple high profile awards that were overturned because of issues with the arbitrators, FINRA has vetted its pool of arbitrators and has instituted new procedures to review arbitrators. Should you feel any better that this has happened?

Having defended broker-dealers and registered representatives over 16 years, I have, at times,

The SEC’s Division of Trading and Markets assured a broker-dealer that a retiring registered representative would not risk enforcement action if, after termination of  the employment, he or she received certain compensation from the firm without maintaining his or her status as a registered associated person.  See Packerland Brokerage Services, SEC No-Action Letter, avail.

On September 18, the SEC approved a FINRA proposal that essentially does away with the ability to have an industry arbitrator serve on your panel.  So the question becomes, why bother arbitrating customer complaints.

Without an industry arbitrator on the panel, you have no choice but to hire an expert witness because there will be

Recently, a Texas appellate court upheld a common law prohibition against a former registered rep who had moved firms.

The court indicated that this departing broker had a common law obligation to maintain confidential information from his prior employer.  See Institutional Securities Corporation, et al. v. Vernon J. Hood, III (December 12, 2012), http://judicialview.com/State-Cases/texas/Employment/Institutional-Securities-Corporation-v-Hood/22/568743

The FINRA Board of Governors is considering implementing new rules that will require brokers to disclose their compensation when they move firms.

In many respects, this will cause issues for those who move firms periodically to obtain bonuses and other compensation increases.  These brokers will be required to disclose to their clientele what their compensation package