December 9, 2020 -FINRA Board of Governors Meeting

FINRA’s Board of Governors met via zoom on December 9, 2020. The Board approved three proposed rulemaking amendments and also approved FINRA’s 2021 proposed budget.  One of the proposed amendments

SEC Risk Alert – Investment Adviser Compliance Programs

On November 19, 2020, the  Securities and Exchange Commission (“SEC”) issued a Risk Alert noting deficiencies in Investment Adviser Compliance Programs with regard to Rule 206(4)-7 under the Investment Adviser

SEC Risk Alert – Supervision, Compliance and Multiple Branch Offices

On November 9, 2020, the Securities and Exchange Commission (“SEC”) released its observations from the Office of Compliance Inspections and Examinations (“OCIE”) related to the supervision and compliance of registered

FINRA Disciplinary Action: October 2020

Firms Fined BGC Financial, L.P On August 13, 2020, BGC Financial, L.P was censured, required to update its Written Supervisory Procedures (“WSP”) and fined $100,000. The Firm consented to the

Regulatory Notice 20-35 –FINRA Alerts Firms to Phishing Email Requesting Them to Respond to Fraudulent Survey

FINRA released a regulatory notice warning all member firms of a phishing attempt from an organization trying to impersonate FINRA. Phishing is a cybercrime where targets are contacted by email

SEC Files $1 Million DollarFraud Complaint Against Advisor

The Securities and Exchange Commission (“SEC”) filed a complaint in the U.S. District Court for the Northern District of New York in Buffalo against Cygnus Capital Management and the estate

SEC Warns of Rise in ‘Credential Stuffing’ Cyberattacks

The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) has observed an increase in credential stuffing attacks.  What is Credential Stuffing? Bad actors target client accounts via compromised login credentials. This

Protecting Senior Investors

On September 1, 2020 the Securities and Exchange Commission (“SEC”) filed an emergency action charging investment adviser Matthew O. Clason with stealing thousands of dollars from an advisory client. Clason

FINRA Disciplinary Action: August 2020

Firms Fined Exane, Inc. Exane, Inc. was fined $50,000 for failing to establish management controls and supervisory procedures to manage the financial and regulatory risks of the business. The firm’s

SEC Expands Accredited Investor Definition

The Securities and Exchange Commission (“SEC”) amended the accredited investor definition, allowing more investors to qualify to participate in private offerings. Formerly, to qualify as an “Accredited Investor,” an individual

Anti-Money Laundering Violations – Get Ready to Pay

Pursuant to FINRA Rule 3110, member firms are charged with the responsibility of implementing and enforcing a written Anti-Money Laundering Compliance Program (“AMLCP”) in efforts to combat money laundering and

Virtual Business Entertainment

FINRA Rule 3220 sets strict limits on the gifts and gratuities that financial professionals can give or receive. Gifts and gratuities are subject to a $100 per year, per person

SEC Charges South Florida Spouses with $500M Scam

The Securities and Exchange Commission (SEC) filed an asset freeze to stop Lisa McElhone and Joseph W. LaForte’s fraudulent scheme worth $500 million. The scheme involved raising investor funds via

Increase in Electronic Communication Disciplinary Actions

COVID-19 has impacted the world’s operations tremendously. From volatile   markets, to business loan grief, and overwhelming cyber threats, member firms have been forced to a new work environment, remote. Though

SEC Charges App Developers for Unregistered Security-Based Swap Transactions

Abra, a California-based trading app, and related firm Plutus Technologies Philippines Corp (“Plutus”), were charged by the Securities and Exchange Commission (SEC) on July 13, 2020. Abra and the related

Cybersecurity: Ransomware Alert

The U.S Securities and Exchange Commission (“SEC”) has focused on cybersecurity issues for many years, but with increased observation of cyber threats, the Office of Compliance Inspections and Examinations (“OCIE”)

ThinkAdvisor Article: “CCO Hit by FINRA for Business Email Infractions”

ThinkAdvisor published an article on June 18, 2020 discussing the importance surrounding broker-dealers retention and review of electronic communications. FINRA took action against a firm’s Chief Compliance Officer (“CCO”) for

April 2020 FINRA Disciplinary Actions

FINRA disciplinary actions taken against firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules. Firms Fined ACS Execution Services, LLC The Firm was fined

FINRA Regulatory Notice 20-05

Read our Regulatory Brief on the proposed new changes to FINRA’s Continuing Education Program (“CE”). FINRA Regulatory Notice 20-05 – CE Program Proposed Changes

Regulation Best Interest

Read our Regulatory Brief on Regulation BI to learn more about the requirements. Asgard Regulatory Brief – Regulation Best Interest (1.28.2020)

December 2019 FINRA Disciplinary Actions

FINRA disciplinary actions taken against firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules. Firms Fined World Equity Group The Firm was fined $18,500

November 2019 FINRA Disciplinary Actions

FINRA disciplinary actions taken against firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules. Individuals Barred Hannah Burgess Burgess was barred from association with

October 2019 FINRA Disciplinary Actions

      FINRA disciplinary actions taken against firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules. Firm Fined Dawson James Securities, Inc. The

2019 Report on FINRA Examination Findings and Observations

In efforts to become more transparent and aid firms in improving their compliance and risk management programs, FINRA has developed the 2019 Report on Examination Findings and Observations. FINRA Findings

Cybersecurity Alert: Cloud-Based Email Account Takeovers (Information Notice 10.2.19)

Cybersecurity has become a continuous concern as hackers constantly create new ways of gaining private information from their targets, leaving firms vulnerable to attacks. Although firm’s are required to implement

‘Tis the Season for an AML Inspection

      As Summer has turned to Fall and you are getting around to that “To Do” list that may have hit the back burner all summer, it’s time

September 2019 FINRA Disciplinary Actions

      FINRA disciplinary actions taken against firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules. Firm Fined Clearpool Execution Services, LLC The

August 2019 FINRA Disciplinary Actions

FINRA disciplinary actions taken against firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules. Firm Fined Robert W. Baird & Co. Incorporated (Milwaukee, Wisconsin)

SEC Risk Alert – Investment Adviser Principal and Agency Cross Trading Compliance Issues

      Overview On September 4, 2019, the  Office of Compliance Inspections and Examinations (“OCIE”) issued a Risk Alert related to principal trading and agency cross transactions under Section

July 2019 FINRA Disciplinary Actions

      The following disciplinary actions were taken against both firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules: Firm Fined Midtown Partners