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”) is committed to responding to such threats while also monitoring cybersecurity developments and improving operational resiliency.

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 failing to retain business communications and for using an outside email address to conduct business.

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 $75,000 for reporting Reportable Order Events (ROE) to OATS that contained inaccurate or incomplete or improperly formatted data regarding events timestamped in milliseconds.

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

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

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 for failing to report to the Trade Reporting and Compliance Engine (“TRACE”).

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 any FINRA members for converting customer funds in the amount of $1,869.

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 Firm was fined $20,000 as a result of Registered Representatives contacting phone numbers that appeared on a national do not call list.

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 Firm was fined $20,000 as a result of Registered Representatives contacting phone numbers that appeared on a national do not call list.

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 policies and procedures to protect customer information pursuant to SEC Regulation S-P, it is difficult to anticipate every threat or hazard that could occur.

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 to focus on your year-end compliance priorities. Plenty of people use a pen and paper, calendar, or online diary without any issues. And yet, a new to do list seems to emerge daily with important items being left behind.

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 Firm was censured and fined $473,000, of which $43,000 was paid to FINRA and the remaining paid to other self-regulatory organizations for failing to create and maintain a compliance system fulfilling FINRA requirements.

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). The Firm was censured and fined $150,000 for publishing seven (7) research reports authored by an analyst that was in employment discussions with the issuer.

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 206(3) of the Advisers Act. These topics were identified in recent examinations of investment advisers.

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 & Co., LLC. The Firm was fined $50,000 for failing to enforce the policies and procedures outlined in its WSPs related to the trading of securities on the Restricted List and Watch List.

The Office of Compliance Inspections and Examinations (“OCIE”) conducts a series of examinations assessing SEC RIAs business practices, with the purpose in protecting retail investors. The OCIE has recently examined over 50 RIAs revealing a variety of deficiencies.

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: Wilson-Davis & Co., Inc. The Firm was fined $32,500 for failing to maintain and establish policies within its Written Supervisory Procedures (“WSP”) to effectively review email communications sent and received by Registered Representatives (“RR”).

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: Great Point Capital LLC, Chicago, Illinois. The Firm was censured and fined $20,000 for failing to accurately and timely submit Reportable Order Events (“ROE”) to OATS. ROEs were rejected for context and syntax errors but were repairable.

Firms Suspended: CSSC Brokerage Services, Inc. The Firm was fined $120,000, suspended for one year from participating in private securities offerings and required to pay $130,000 in restitution to customers.

The Office of Compliance Inspections and Examinations (“OCIE”) conducts the SEC’s National Exam Program with a mission to protect investors by improving compliance, preventing fraud, monitoring risk and informing policy. The results of OCIE’s examination are used by the SEC to inform rule-making initiatives, identify and monitor risks, improve industry practices and pursue misconduct.