How to avoid being sued 2.0
Over the years that I have defended financial advisors and their firms, I have frequently spoken and written about ways to avoid the risk of being sued. I prepared a guidebook a couple of years ago...
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Is This A Preview of FINRA’s Approach to Rule 3110(e)
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...
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So Who Wants To Give A Vendor Access To Your IT Systems
At one time or another, member firms will likely need the services of an outside vendor. This may be particularly true for smaller member firms. Outside vendors have their place, but FINRA’s Report on...
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Why Reverse Churning Does Not Create Cream From Butter.
For years, firms have been using wrap products to charge an annual fee based upon the value of assets under management regardless of the number of trades, as opposed to fees per trade. In other words,...
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What The Heck Is A Senior Designation
That is one of the questions FINRA sought to answer in its recent National Seminar Investor Initiative. FINRA confirmed that many representatives use such designations, but some of them are bogus or no...
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So What Does The SEC Think About Cybersecurity
At the end of last month, the SEC provided a guidance update on cybersecurity for registered investment companies and registered investment advisors. This guidance is equally instructive for...
View ArticleWho You Gonna Call? FINRA!
Last month, FINRA launched a toll-free FINRA Securities Helpline for Seniors at 844-57-HELPS (844-574-3577) to provide older investors with assistance from FINRA staff related to concerns they have...
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Does FINRA Really Want To Make It Easier To Communicate With The Public
In FINRA Notice to Members 15-16, FINRA has solicited comments to its proposal that would make communications with the public a bit easier. FINRA proposes to change Rule 2210 (communication with the...
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Who Wants Additional Guidance On Dealing With Customers With Diminished Capacity
On June 2, the SEC published an investor Bulletin on Planning for Diminished Capacity and Illness (the “Bulletin”). Previously, the SEC and FINRA issued a National Senior Investor Initiative. Clearly,...
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You just suffered a cyberattack, now what
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...
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So who really thinks the SEC is not focused on elder investors
If there is any question that the SEC is focused on elder investor issues, look no further than its recent program announcement. The SEC initiated a program designed to examine retirement planning...
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Do you really need a reason why not to provide your client with a personal...
Not too long ago, I tried a case that had, among other issues, the improper use of the advisor’s personal email account. That improper use serves as a valuable lesson of what can go wrong when you...
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FINRA Board Shake-up Coming?
Later this month, on July 30th, FINRA will hold its annual meeting in Washington, D.C., during which it will conduct an election for three open seats on its Board of Governors. On FINRA’s 24-member...
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FINRA Election Results: Shaken, not Stirred
The FINRA Board of Governors election results are in. There were three vacancies among the 10 seats reserved for industry representatives: one Large, one Mid-Size, and one Small Firm Governor. John...
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Who wants some advice regarding cyber-threats?
A recent article in Onwallstreet.com highlighted certain areas of focus for investment advisors/broker-dealers when it comes to addressing cyber-threats. The article focused on four areas of particular...
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What do you need to know about the latest FINRA sweep exam
FINRA recently sent out targeted exam letters focused compensation practices. The intent of this targeted exam is to assess how firms identify, mitigate and manage conflicts of interest when it comes...
View ArticleFINRA’s New EB-5 Disclosure Requirements re: Foreign Finders
New FINRA Rule 2040 became effective late last month, requiring broker-dealers who sell EB-5 securities disclose to investors the amount of finder fee payments to non-registered foreign persons and...
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Why therapeutic neglect and an 8210 request do not go hand in hand
In first of a series of articles on FINRA enforcement and the disciplinary process, Scott Matasar gave some sage advice on dealing with an 8210 request. The biggest take away is that ignoring the...
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What an amended FINRA Rule 8312 may mean to you.
FINRA has released for comment its proposed amendment to Rule 8312, otherwise known as the BrokerCheck Disclosure rule. As it currently stands, FINRA waits for 15 days before it releases information...
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So who wants to know what FINRA has proposed to do about elder clients
I have blogged in the past about the thorny issues confronted by broker-dealers and financial advisors when it comes to dealing with elder clients. FINRA has, for one, proposed rulemaking to address...
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