Archive

SEC Announces Record Enforcement Actions for FY2016

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…
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Capital Acquisition Brokers: Is FINRA’s New Broker-Dealer Category a Good Deal?

On August 18, the U.S. Securities and Exchange Commission (SEC) announced it has adopted new rules proposed by the Financial Industry Regulatory Authority (FINRA) that lessen the requirements for “capital acquisition brokers” (CABs) – firms that serve…
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Andrew Ceresney: SEC Enforcement Expands Focus on Private Equity Broker-Dealer Activities

Maryland private equity fund advisory firm, Blackstreet Capital Management, LLC, and its owner, Murry N. Gunty, have agreed to pay more than $3.1 million to resolve allegations they violated the Securities Exchange and Investment Advisors…
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FINRA’s Top 5 Enforcement Action Sanctions Of 2015

In 2015 alone, the Financial Industry Regulatory Authority (FINRA) brought more than 1,510 disciplinary actions, charged $95.1 million in fines and ordered $96.6 million in restitution payments. Those violations resulting in the largest fines and…
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FINRA Identifies “Red Flags” for AML Compliance

FINRA recently entered into a settlement with Gar Wood Securities LLC (the “AWC”) concerning allegations that Gar Wood facilitated the sale of restricted securities in violation of the Section 5 of the 1933 Act, and…
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4th Circuit Further Defines A “Customer” Under FINRA Arbitration Rules

Following its broad ruling in UBS Financial Services v. Carilion Clinic, 706 F.3d 319 (4th Cir. 2013), the 4th Circuit has issued two recent decisions that somewhat lessen the impact of the UBS holding. In…
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FINRA Hits Lincoln Financial With Failure to Supervise Concerning a Ponzi Scheme

Lincoln Financial Securities Corp. recently settled with FINRA concerning supervisory deficiencies over a now-deceased rep (Kenneth Wayne McLeod) who purportedly ran a Ponzi scheme targeting retired government employees (Department of Enforcement v. Lincoln Financial Services…
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Herskovits PLLC Submits Comments to FINRA Proposed Rule on Recruitment Compensation Practices

On January 30, 2013, we sent FINRA a comment letter concerning the controversial proposed rule which would require disclosure of all “enhanced compensation” – forgivable loans, up-front bonuses, back-end bonuses, and the like – to…
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Courts Lining Up in Favor of Broad Definition of Customer Under FINRA Rules

Last week, the U.S. Court of Appeals for the 4th Circuit issued a favorable ruling on the arbitrability of suits against FINRA members. Traditionally, under FINRA Rule 12200 any “customer” may request arbitration of a…
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FINRA Is Looking for Additional Disclosure on Up Front Loans to Reps

It is commonplace in the securities industry for reps to transition from one broker-dealer to another. If the rep is a big producer, it is typical for the hiring firm to offer the rep a…
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