U.S. Securities and Exchange Commission (SEC)

It is almost axiomatic that the SEC “enjoys” bringing enforcement actions against lawyers.  The SEC believes that lawyers have a special duty to protect and police the securities markets, and, when a lawyer fails, the SEC is right there to pounce.

In fact, the SEC fined and barred an attorney from practicing before the Commission

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

confusion.jpgAt a regulator’s round table during a recent National Society of Compliance Professionals meeting, the regulators framed out those issues that are keeping them up at night.  The issues include:

  1. The increasing complexity of investment products.
  2. Social media beyond things like Twitter or LinkedIn.
  3. Cyber security.
  4. Cyber fraud; i.e. hacking into customer accounts.
  5. AML issues

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

money.jpgThe SEC recently announced that its top priority is to increase the number of investment adviser examinations it conducts on an annual basis.  Considering that the SEC only examined 8% of all investment advisers in 2012 (where 40% have never been examined), the SEC could only increase the number of such examinations.

The talk, for

This has been the week of scandals.  With political forces, lobbyist and lots of deep pockets, our government is a breeding ground for scandals.  The SEC has certainly not been immune.  A few years ago, the SEC made headlines because several of its employees were watching pornography during working hours.  Recently, the former chief inspector

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