Every year the Financial Institution Regulatory Authority (FINRA) issues its “Report on FINRA’s Examination and Risk Monitoring Program.” The Report covers issues noted during the prior year’s exams and topics that examiners...more
1/13/2023
/ Anti-Money Laundering ,
Best Execution ,
Books & Records ,
Cryptocurrency ,
Examination Priorities ,
Financial Crimes ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Form CRS ,
Market Manipulation ,
Regulation Best Interest ,
Securities Transactions ,
Variable Annuities
On March 31, 2022, the Securities Industry and Financial Markets Association (“SIFMA”) released its after-action report on Quantum Dawn VI – a global financial-markets cybersecurity exercise....more
The regular “Weekly Update” email from the Financial Industry Regulatory Authority (“FINRA”) had an eye-catching warning February 16, urging broker-dealer member firms to heed the “Shields Up” cyber threat warning from the...more
2/17/2022
/ Critical Infrastructure Sectors ,
Cyber Attacks ,
Cyber Crimes ,
Cyber Threats ,
Cybersecurity ,
Data Breach ,
Data Protection ,
FBI ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Hackers ,
Homeland Security Cybersecurity & Infrastructure Security Agency (CISA) ,
New Guidance ,
Personally Identifiable Information ,
Russia ,
Threat Management ,
Vulnerability Assessments
The Financial Crimes Enforcement Network (“FinCEN”) unit of the U.S. Department of the Treasury called this week for the nation’s financial institutions to be on the lookout for money flows indicative of environmental crimes....more
On March 4, FINRA issued a Regulatory Notice warning member firms not to fall for phishing scam preying on compliance fears. The scam uses a phony email address, supports@finra-online.com, demanding an immediate response to...more
On February 1, 2021, the Financial Industry Regulatory Authority (“FINRA”) released its “Report on FINRA’s Risk Monitoring and Examination Activities.” The Report combines two of FINRA’s long-standing reports: (a) the...more
2/3/2021
/ BSA/AML ,
CARES Act ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Industry Examinations ,
Paycheck Protection Program (PPP) ,
Private Placements ,
Regulatory Oversight ,
Social Media ,
Stock Trades ,
Variable Annuities
This week the US Department of Justice (“DOJ”) announced a trio of criminal prosecutions for fraudulent PPP loan applications. Each involved inter-agency investigations involving the IRS Criminal Investigation Division...more
6/26/2020
/ Bank Fraud ,
Banking Sector ,
CARES Act ,
Criminal Prosecution ,
Department of Justice (DOJ) ,
False Statements ,
Financial Institutions ,
Loan Applications ,
Money Laundering ,
Paycheck Protection Program (PPP) ,
Wire Fraud
This week FINRA issued Reg. Notice 20-08 on “Pandemic-Related Business Continuity Planning, Guidance and Regulatory Relief.”...more
3/12/2020
/ Business Continuity Plans ,
China ,
Coronavirus/COVID-19 ,
Crisis Management ,
Cybersecurity ,
Data Protection ,
Emergency Management Plans ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Services Industry ,
Flexible Work Arrangements ,
Infectious Diseases ,
Public Health ,
Relief Measures ,
Telecommuting
Last week, the unanimous Supreme Court clarified that the “clearing and settlement” exception to a bankruptcy trustee’s avoiding powers covers only payments “to,” not merely through, financial market participants....more
3/6/2018
/ Avoidance ,
Bankruptcy Code ,
Chapter 11 ,
Commercial Bankruptcy ,
Debtors ,
Financial Institutions ,
Fraudulent Transfers ,
Intermediaries ,
Merit Management Group v FTI Consulting ,
Safe Harbors ,
SCOTUS ,
Section 546(e) ,
Split of Authority ,
Trustees
The Sixth Circuit Court of Appeals dismissed a suit by the Tennessee, Georgia and New York Republican parties challenging the constitutionality of an MSRB extending pay-to-play prohibition to municipal advisors. The Court...more
7/14/2017
/ Article III ,
Constitutional Challenges ,
Dodd-Frank ,
Financial Institutions ,
MSRB ,
Municipal Advisers ,
Municipal Securities Market ,
Pay-To-Play ,
Regulatory Oversight ,
Rule G-37 ,
Standing
On June 1, new SEC Chair Clayton returned the SEC to the arena in the policy debate surrounding the DOL’s Fiduciary Rule. Clayton’s public statement responded to a direct invitation for SEC participation by DOL Secretary...more
6/2/2017
/ Best Interest Contract Exemptions ,
Comment Period ,
Conflicts of Interest ,
Department of Labor (DOL) ,
Dodd-Frank ,
Employee Benefits ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Fiduciary Rule ,
Financial Institutions ,
Investment Adviser ,
Retirement Plan ,
Securities and Exchange Commission (SEC)
The two remaining SEC Commissioners agreed March 1 to propose amendments “requiring” municipal securities issuers to disclose non-security financial obligations and material events occurring in other outstanding obligations....more
Effective April 3, 2017, all FINRA arbitration participants (except pro se parties) must use FINRA’s web-based DR-Portal to file and serve documents in both customer and industry arbitrations.
...more
2/8/2017
/ Arbitration ,
Electronic Filing ,
Filing Requirements ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Investment ,
Mediation ,
Portal ,
Pro Se Litigants ,
Securities ,
Securities and Exchange Commission (SEC)
The White House clarified that Trump’s January 30 “two for one” Executive Order doesn’t apply to the SEC and other independent regulatory agencies, Reuters reported.
...more
After markets closed on Friday the 13th, the U.S. Department of Justice (“DOJ”) announced an $864 million settlement regarding Moody’s credit ratings of residential mortgage-backed securities (“RMBS”) and collateralized debt...more
1/19/2017
/ Civil Monetary Penalty ,
Collateralized Debt Obligations ,
Cooperative Compliance Regime ,
Credit Rating Agencies ,
Credit Ratings ,
Department of Justice (DOJ) ,
Financial Crisis ,
Financial Institutions ,
Financial Markets ,
FIRREA ,
Moody's ,
Rating Agencies ,
RMBS ,
Securities ,
Securities Violations ,
Settlement
OCIE released its 2017 exam priorities on January 12. The priorities list was most notable for being shorter than prior years. But that likely means only more focus, rather than less vigor....more
1/13/2017
/ BSA/AML ,
Cybersecurity ,
ETFs ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Investment ,
Investment Adviser ,
Money Market Funds ,
Municipal Advisers ,
OCIE ,
Pensions ,
Private Funds ,
Recidivism ,
Retail Investors ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC)
On January 4, new President and CEO Richard Cook issued FINRA’s Annual Regulatory and Examination Priorities Letter. This year’s list in summary is:
New for 2017:
Targeted electronic off-site reviews “on select...more
1/6/2017
/ Big Data ,
BSA/AML ,
Cybersecurity ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Industry Examinations ,
Liquidity Risk Management Rule ,
Market Manipulation ,
Mutual Funds ,
Regulatory Agenda ,
REIT ,
Risk Management ,
Risk Mitigation ,
Securities ,
Spoofing
In late October, FINRA issued a sweep exam, commanding firms to produce 15 categories of documents about firm’s cross-selling programs over a 5-year span. The sweep seeks information on cross-selling, including incentives...more
The Public Investors Arbitration Bar Association (PIABA) renewed its criticism of FINRA’s Broker-Check® system in a report issued in late October. PIABA was especially critical of the system’s:
Lack of synchronization...more
The Sixth Circuit this week declined the SEC’s request to dismiss a Constitutional challenge to the new MSRB pay-to-play rules. Instead, the Court ordered the case to a merits panel for consideration. The Republican parties...more
10/10/2016
/ Administrative Merits Determinations ,
Broker-Dealer ,
Financial Institutions ,
Financial Markets ,
Investment Adviser ,
Motion to Dismiss ,
MSRB ,
Municipal Advisers ,
Pay-To-Play ,
Securities ,
Securities and Exchange Commission (SEC)
The Securities Division of Tennessee’s Department of Commerce and Industry has increased its enforcement activity during 2016. The recent actions include:
Final Administrative Orders:
Clifton Alexander and HugeROI.com...more
In a July 22 Notice, FINRA took umbrage at a growing line of Court decisions suggesting that a later or more-specific forum selection clause in an agreement between the parties may override a prior customer arbitration...more
It’s hornbook law that a later intentional breach of contract, alone, doesn’t equal promissory fraud. Holding it therefore cannot establish mail or wire fraud, the Second Circuit reversed the Government’s $1.2 Billion FIRREA...more
5/26/2016
/ Banking Sector ,
Breach of Contract ,
Countrywide ,
False Claims Act (FCA) ,
Fannie Mae ,
Financial Institutions ,
FIRREA ,
Freddie Mac ,
GSE ,
Mail Fraud ,
Mortgage Fraud ,
Mortgages ,
Wire Fraud
The Supreme Court held May 16 that the exclusive federal jurisdiction provision of the 1934 Securities Exchange Act means the same as the “arising under” test for federal-question jurisdiction and does not pre-empt state law...more
5/18/2016
/ 28 USC 1331 ,
Exclusive Jurisdiction ,
Federal Jurisdiction ,
Financial Institutions ,
Merrill Lynch ,
Merrill Lynch v Manning ,
Regulation SHO ,
SCOTUS ,
Securities Exchange Act ,
Securities Litigation ,
Short Selling
Richard Ketchum, the retiring CEO of FINRA, said that the regulator intends to expand the reporting available through its BrokerCheck® web tool to include relative concentrations of disciplined brokers in industry firms....more