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

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:

  1. Read the SEC and FINRA exam priority letters that each issue

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?

It is bad enough that firms and publicly traded companies have to make sure that their respective IT architecture is safe and secure, but recent developments demonstrate that you have to be weary regarding the media outlet with who you share material, non-public information.19196909_s

The SEC and the DOJ in a joint effort have brought

Two years ago, the United States Supreme Court stated in an opinion that the five-year statute of limitations for the SEC to seek civil monetary sanctions began from the date of the fraudulent act, as opposed to when the SEC discovered the fraudulent act. In doing so, the Court rejected the discovery rule.

The discovery

A recent Investment News article highlighted the pervasive problem associated with cyberattacks and offered some guidance in the event of an attack. Before visiting that guidance, understand how pervasive these attacks are.

The SEC recently conducted a sweep on cyberattacks. This sweep revealed that 88% of broker-dealers and 74% of advisors have experienced some form

The U.S. Court of Appeals for the Sixth Circuit affirmed a dismissal of investors’ securities claims in the wake of a bank liquidation, but left the door open to a possible “silent fraud” claim under Michigan law.  See Dailey v. Medlock, http://www.bloomberglas.com/public/document/Thomas_Dailey_et_al_v_Lisa_Medlock_et_al_2014_BL_9430_6th_Cir_Jan.

A claim for silent fraud under Michigan law requires a plaintiff

A federal court held that life settlements were securities under federal and Illinois law.  As such, certain sellers violated the securities laws when they lied about having done due diligence.  The court also found that a reasonable jury could conclude that the sellers violated the Illinois Consumer Fraud Act.  See Giger v. Ashmann (ND Ill).

FINRA arbitrations may never be the same because FINRA recently proposed to redefine “public arbitrator” to exclude anyone from the financial industry from falling within that definition.  Couple that proposal with the existing ability of a claimant to select an all public panel and you have a totally new arbitration system. 

What does this proposal