U.S. Financial Industry Regulatory Authority (FINRA)

FINRA litigants and arbitrators alike should take note of a federal court’s decision rejecting an unexplained FINRA award when it was unable to discern its basis, notwithstanding that FINRA rules did not require an “explained” decision, and later vacating the explained award once it demonstrated the panel’s manifest disregard of the law. This decision has

fraud.jpgThe outside business activities of registered persons have the potential for causing your firm significant liability, especially where those activities are unknown to the firm, involve firm customers and constitute a fraud.  FINRA 3270 only requires the registered person to provide notice to the firm before engaging in the activity, but should the firm do

idea.jpgThe Financial Industry Regulatory Authority (FINRA) recently announced that it expects to send a proposal to the SEC to make it easier for registered representatives to clear their record of black marks.  Up until now, the process for expungement has been drawn out and extremely limited in application.

The primary issue FINRA is attempting to

Recently, FINRA publicized penalties against three companies and associated individuals for failing to implement adequate anti-money laundering procedures.  These fines should serve as a warning to the industry as a whole that FINRA is very focused on AML policies and procedures.

In its announcement, FINRA noted that the firms failed to implement adequate procedures to

While many brokers breathed a sigh of relief when FINRA withdrew its proposal requiring members to include a “prominent description of and link to” BrokerCheck on their websites and social media pages, this is probably not the end of this matter.

Many firms complained about the proposal because it presented many administrative nightmares; such as

buyholdsell.jpgIn a recent speech, FINRA CEO, Richard Ketchum, told broker-dealer compliance officers that, although firm compliance programs have improved, there must be heightened supervision when it comes to complex products.  In light of these comments, you must assume that the supervision over the sale of complex products will be a focus of your next examination.

This past week, members of the North American Securities Administrators Association lobbied Congress to do away with mandatory arbitration provisions from customer agreements.  In a speech before this group, SEC Commissioner Aguilar expressed that mandatory arbitration agreements must go.  Would this be a bad thing?

Arbitration has be seen as the preference of the industry

Last week, FINRA issued FINRA RN 12-45 laying out several items members should consider in the aftermath of Hurricane Sandy.

For example, FINRA suggested that member firms provide office space to those member firms affected by the Hurricane.  Further, member firms housed in temporary space would not need to make an application for a new branch location or have