Cyber-Security: FINRA’s Targeted Examination Letter

As we posted earlier in outlining  FINRA’s  2014 Regulatory and Examination Priorities Letter, one focus included FINRA’s concern for the integrity of member firms’ policies, procedures and controls that are supposed to protect sensitive customer data.  In the letter, FINRA states that it will examine and conduct targeted investigations and followed up by issuing  a separate notice concerning  Targeted Examination Letters that some firms may get seeking information about how the … Read more

FINRA has ordered Atlanta-based broker-dealer, J.P. Turner & Company, L.L.C. to pay $707,559 in restitution to 84 customers for sales of unsuitable leveraged and inverse exchange-traded funds (ETFs) and for excessive mutual fund switches. FINRA’s action against J.P. Turner is another reminder of the need for broker-dealers to carefully scrutinize the suitability of such non-conventional investments products like inverse exchange-traded funds. While FINRA mutual … Read more

Effective July 1, 2013, add to the types of  individuals who are no longer eligible to serve as public arbitrators in FINRA arbitrations persons associated with, or registered through, a mutual fund or hedge fund. The list has been growing and already includes  (i) attorneys and accountants who derive a certain percentage or a certain amount of their income from the securities industry, … Read more

Seeking to ensure that broker-dealers identify conflicts and place their customers’ interests above there own, FINRA sent to its member firms, in July, another “Targeted Examination Letter“  announcing that it would be conducting targeted examinations (or sweeps) of  member practices to review how they identified and managed conflicts of interest.  The letter sent to  a number of firms seeks a response by September 14, 2012, followed by … Read more

FINRA: Advertising Rules Guidance For DOL Disclosure For Participant-Directed Plans

  FINRA has now provided regulatory guidance  to member firms about how its advertising rules  (NASD Rules 2210 and 2211) would apply to information they provide to participant-directed individual account plan participants under a U.S. Department of Labor rule.  The DOL rule, Rule 404a-5, was designed to ensure that plan participants are provided with sufficient information about the plan and … Read more

Client Records, You Can’t Always Take Them with You When you Go

Despite the SEC’s adoption of Regulation S-P back in 2000, some reps still mistakenly believe that client accounts belong to them and that they are free to take them, including any information about the client, when they depart one firm for another.  And whether by bringing  improper recruiting practices or misuse of client information enforcement cases, FINRA and the SEC … Read more

On December 16, Financial Industry Regulatory Authority (FINRA)  issued a Press Release highlighting its regulatory accomplishments during 2011.  FINRA makes clear its goal is two-fold:  protecting investors and bringing transparency to financial markets.  The release demonstrates for senior management, risk management and compliance managers the additional arsenal FINRA is employing to beef up its oversight of broker-dealers and their registered reps.  So far, for … Read more