FINRA Lawyer Blog

During the “SEC Speaks” Conference 2017, Acting U.S. Securities and Exchange Commission Chair Michael Piwowar amply discussed the plight of the “forgotten investor.” Citing the work of sociologist William Graham Sumner, who spoke of The Forgotten Man, “the victim of the reformer, social speculator, and philanthropist,” Piwowar questioned disclosure requirements, high corporate penalties and accreditation…

New FINRA Rule 2165 (Financial Exploitation of Specified Adults) and Amendments to FINRA Rule 4512 (Customer Account Information) America’s population is rapidly aging. The number of US residents over the age of 65 is expected to double over the next 30 years. Today, seniors, specifically baby boomers, control 50% of all existing investable assets across…

The U.S. Securities and Exchange Commission is considering whether it will bring enforcement actions against Atlanta’s $205 billion-asset SunTrust Banks. SunTrust Investment Services, the bank’s broker-dealer arm, allegedly purchased pricey mutual funds on behalf of customers when more affordable alternatives were readily available. The SEC has made a “preliminary determination to recommend that the SEC…

It may come as no surprise that doing business in China holds a high risk of Foreign Corrupt Practices Act (FCPA) violations. However, the record-setting numbers of FCPA enforcement actions seen in 2016 placed Mexico in a close second. With increases in multi-jurisdictional anti-corruption enforcement, the FCPA Pilot Program and a number of new Mexican…

Credit Suisse Securities U.S.A. LLC has agreed to pay $16.5 million to resolve Financial Industry Regulatory Authority (FINRA) allegations that the firm violated anti-money laundering (AML) program regulations, supervision requirements and other policies, FINRA reported Monday. Specifically, FINRA found that Credit Suisse’s U.S. division relied solely on registered representatives to report suspicious trading, who then…

As the Financial Industry Regulatory Authority (FINRA) continues to crack down on broker-dealers with anti-money laundering program (AML)-related deficiencies, broker-dealers and AML compliance officers (AMLCOs) should take note of the most common AML program compliance deficiencies mentioned in recent FINRA enforcement actions. These top six areas of deficiency are the most likely focus areas of…

The Financial Industry Regulatory Authority (FINRA) has fined Merrill Lynch, Pierce, Fenner & Smith Inc. $6.25 million for inadequately supervising its customers’ use of leverage in their Merrill brokerage accounts. The firm has also agreed to pay approximately $780,000 in restitution to 22 customers whose portfolios were over concentrated and highly leveraged in high-risk Puerto…

VALIC Financial Advisors Inc. has agreed to pay $1.75 million to resolve Financial Industry Regulatory Authority (FINRA) allegations that the firm failed to implement reasonable systems to address and review conflicts of interest created by its compensation policy, FINRA reported Monday. The Houston-based subsidiary of American International Group Inc. allegedly paid its representatives financial incentives…

Securities law violations are a major focus of regulatory compliance programs across the industry. Yet not all organizations realize the threat cybersecurity breaches pose to company viability. A new breed of corporate whistleblower is cropping up among marketplace professionals – the cybersecurity whistleblower. Compliance professionals and executives should familiarize themselves with potential violations and implement…

On October 11, 2016, the U.S. Securities and Exchange Commission (SEC) released its fiscal year 2016 (FY2016) enforcement results, reporting collections totaling over $4 billion in disgorgement and penalties out of a record 868 enforcement actions against executives, companies and gatekeepers. SEC enforcement proceedings for FY2016 focused largely on cybersecurity compliance, financial reporting deficiencies, insider…