SEC and FINRA Release 2021 Examination Priorities
3/15/21
By: Chad Weaver and Tyler Jacobs On March 3rd, the SEC Division of Examinations announced their 2021 examination priorities. Earlier this year, on February 2nd, FINRA released a report of Examinations and Risk Monitoring to provide insight to member firm’s compliance programs. Unsurprisingly, there is significant overlap between the priorities of the two securities regulatory…
FINRA Amends Rules to Incentivize Timely Payment of Arbitration Awards
6/17/20
By: Kathleen Cusack and Kirsten Patzer On May 21, 2020, the Financial Industry Regulatory Authority (FINRA) announced that effective September 14, 2020, its Membership Application Program (MAP) rules will be amended to further incentivize the timely payment of arbitration awards. The amendment to MAP will seek to do so by preventing an individual from switching firms…
FINRA Issues Guidance on Remote Work Including Continued Warning for Cyber Threats
6/15/20
By: Kathleen Cusack and Kirsten Patzer Although all 50 states have begun the process of reopening, business spaces have not yet returned to full capacity and many people continue to work remotely. On May 28, 2020, the Financial Industry Regulatory Authority (FINRA) issued new guidance for working from home based on surveys of financial firms. …
FINRA In-Person Hearings Further Postponed Until July 31
5/20/20
By: Kathleen Cusack and Kirsten Patzer On Friday, May 15, 2020, amidst continued concern over the potential spread of COVID-19, the Financial Industry Regulatory Authority (FINRA) postponed all in-person arbitration and mediation proceedings until July 31, 2020. FINRA initially postponed in-person meetings beginning in March and extended the suspension several times. In its most recent…
Business Continuity Plans in the Age of Coronavirus
3/23/20
By: Jennifer Weatherup As the Coronavirus, or COVID-19, has caused unprecedented disruptions, including a precipitous decline in the stock market, it is increasingly important for broker-dealers to prepare plans which will allow them to fulfill their responsibilities to customers and continue operations under difficult circumstances. More specifically, broker-dealers should ensure that their business continuity plans…
Beware of FINRA's Increased Focus on Non-Registered, Associated Persons
8/9/19
By: Elizabeth Lowery On July 29, 2019, FINRA announced that Citigroup Global Markets, Inc. was fined $1.25 million for failing to conduct timely or adequate background checks on approximately 10,400 non-registered associated persons spanning a seven-year period from 2010 to 2017. This large fine issued even though Citigroup had completed screening and fingerprinting which was…
6/17/19
By: Joseph Suarez On June 5, 2019, the U.S. Securities and Exchange Commission (“SEC”) approved its Best Interest Rule (the “Rule”) package requiring broker-dealers, and investment advisors, to act in their retail clients’ “best interests.” The SEC states the Rule, “will impose a materially heightened standard of conduct for broker-dealers when serving retail clients.” Broker-dealers…
Protecting Seniors From Investment Exploitation – One Year Later
6/3/19
By: Ryan Baggs One year after the passage of the Senior Safe Act (the “Act”) the SEC, FINRA, and NASAA continue to emphasize the importance of “covered financial institutions” (“CFIs” or “CFI”) providing adequate training to all relevant employees for the protection of investors over the age of 65. If an employee undergoes proper training…
FINRA Seeks To Simplify Non-Party Discovery
4/9/19
By: Greg Fayard In January 2019, the Financial Industry Regulatory Authority (FINRA) proposed changes to its rules to give non-parties more time to respond to discovery requests and witness orders from arbitration panels. Currently, non-parties only have 10 calendar days from service by U.S. mail to respond or object to document subpoenas or witness/document production…
Latest FINRA Rules to Regulate Expungement Actions
2/19/19
By: Margot Parker FINRA recently announced its approval of enhanced training and guidance for arbitrators hearing expungement requests, an issue under increasing scrutiny as over 90% of such actions are currently granted. The proposal is now under review by the SEC and represents a step toward making it more difficult for brokers to have customer…
FINRA Increases Penalties For Brokers’ Bad Behavior
5/8/18
By: Ted Peters In further response to mounting pressure for securities regulators to exert greater control over problem brokers, the Financial Industry Regulatory Authority (“FINRA”) released Regulatory Notice 18-17 on May 2, 2018. FINRA has long maintained a “rulebook” of sorts to guide adjudicators in disciplinary proceedings when addressing the propriety and scope of sanctions…
New FINRA Proposals for High Risk Brokers
5/4/18
By: Theodore C. Peters On April 30, 2018, FINRA published Regulatory Notice 18-16, captioned “High-Risk Brokers,” which seeks comment on proposed rule amendments that would place further restrictions on not only high-risk brokers, but also the member firms that employ them. FINRA warns that such brokers “may present heightened risk of harm to investors, and…