FINRA Archives - Page 5 of 5 - Broker-Dealer Regulation & Litigation Insights

Category: FINRA

What Effect, if any, will the DOL Fiduciary Duty Rule have on FINRA Arbitrations?

Will FINRA claims change in the wake of the June 9, 2017 DOL Fiduciary Duty Rule (the New Rule)?

While it does not presently have all of the bells and whistles the securities industry has been bracing itself for, it nonetheless places brokers and their broker-dealer employers servicing regular brokerage IRAs in the role of a fiduciary for these accounts. This changes the rule of law in most jurisdictions which previously only held a broker/broker-dealer to a suitability standard unless there were special circumstances. See De Kwiatkowski v. Bear, Stearns & Co., Inc., 306 F.3d 1293, 1302 (2d. Cir. 2002).

Continue reading “What Effect, if any, will the DOL Fiduciary Duty Rule have on FINRA Arbitrations?”

Political Contribution Limitations Now Also Mandatory for Broker-Dealers

The SEC’s Rule 206(4)-5 under the Investment Advisers Act of 1940 (Advisers Act), aka the Pay-to-Play Rule, was partially delayed until recently, when FINRA adopted a complementary Rule. Broker-dealers that engage in distribution or solicitation activities with a government entity on behalf of any investment adviser need to pay close attention to the rule changes. I have outlined the rules, penalties and new FINRA rule below.
Continue reading “Political Contribution Limitations Now Also Mandatory for Broker-Dealers”

The SEC’s 2017 Cybersecurity Alert and New Cyber Unit

In August 2017, the SEC’s Office of Compliance Inspection and Examinations (OCIE) issued a Risk Alert outlining observations from its “Cybersecurity 2 Initiative,” which was built upon its 2014 “Cybersecurity 1 Initiative.” Notably, this alert offered a rare industry compliment, describing “an overall improvement” in cybersecurity practices and processes since the Cybersecurity 1 Initiative. Below we summarize the OCIE staff’s observations, certain criticisms and their descriptions of robust policies, procedures and practices.
Continue reading “The SEC’s 2017 Cybersecurity Alert and New Cyber Unit”