Annual Compliance Testing Should Re-Calibrate WSPs
As 2015 ended, FINRA fined Barclays Capital $13.75 million for mutual-fund switching and breakpoint supervisory failures that might have been avoided if that part of Barclay’s WSPs had been properly...
View ArticleSupreme Court Declines to Hear NECA-IBEW Pension Trust Fund v. Lewis
On January 11, 2016, the United States Supreme Court denied the petition for writ of certiorari filed October 29, 2015, by Plaintiff/Appellant NECA-IBEW Pension Trust Fund in its case against Bank of...
View ArticleSEC Announces 2016 Exam Priorities
The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced the agency’s priorities for this year on January 11. Commission staff will focus on three broad areas: Retail Investors,...
View ArticleFINRA Arbitrations: Behind Claimant “Win” Statistics
FINRA reported that, for 2015, Claimants won about half of private securities arbitrations: 47% for all-public panel decisions; 45% for majority-public panels. A colleague and securities mediator, Dana...
View ArticleFIRPTA Withholding Amounts Change
On December 18, 2015, President Obama signed into law the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) as part of the Consolidated Appropriations Act, 2016. The new PATH Act reforms the...
View ArticleFINRA and SEC Identify Areas of Focus and Examination Priorities for 2016
Each year, FINRA and the SEC publish their priority letters explaining areas of focus for the upcoming year. The priorities reflect practices and/or products that are perceived to present either...
View ArticleObama’s FY2017 Budget Would Double SEC & CFTC Funding
White House officials this week said that President Obama’s fiscal 2017 budget will seek major increases in funding for Wall Street regulators in the near term, and proposes to double their funding by...
View ArticleMunicipal Advisor Pay-to-Play Rules “Deemed Approved”
The MSRB’s Rule G-37 amendments applying pay-to-play prohibitions to Municipal Advisors and their third-party solicitors will become effective August 17, 2016. The proposed amendments extend Rule G-37...
View ArticleSEC OIG Cannot Substantiate ALJ Bias
In a January 21, 2016 Report of Investigation, the Inspector General for the Securities Exchange Commission found no evidence to substantiate allegations of pro-agency bias among SEC administrative law...
View ArticleEleventh Circuit Interprets Rule 10b-5(b)
On March 1, 2016, the Eleventh Circuit Court of Appeals affirmed the Southern District of Florida in Fried v. Stiefel Labs., Inc., No. 14-14790, 2016 WL 787986 (11th Cir. Mar. 1, 2016), holding that...
View ArticleFifth Circuit: Diversity Jurisdiction Over FINRA Award Based on Demand
The Fifth Circuit Bar Association’s summary reports: “Appellants were investors who suffered financial losses as a result of R. Allen Stanford’s Ponzi scheme. In their arbitration complaint, they...
View ArticleTN Republican Party Challenges MA Pay-to-Play Rules
On April 12, the Tennessee Republican Party filed a petition in the US Sixth Circuit Court of Appeals, seeking to invalidate the SEC’s approval of new rules extending the MSRB’s long-standing...
View ArticleBroker Compensation-Disclosure Rule Approved by the SEC
It is not uncommon for registered representatives to change broker-dealers over the course of their career. In most cases, their customers will typically switch firms as well, as they follow their...
View ArticleSEC Affirms Sanctions on Stanford’s CCO
The SEC recently affirmed its ALJ’s ruling barring Alan Stanford’s former CCO from the industry and ordering monetary penalties of $260,000 together with $591,992 in disgorgement. The Commission held...
View ArticlePublic Mining of Securities Regulatory Big Data
An article in this weekend’s Wall Street Journal called for FINRA to make the database underlying its BrokerCheck® system (of reports on stockbroker registration and disciplinary history) more widely...
View ArticleMSRB on Direct Purchases – Transparency Trumps Tower?
The Municipal Securities Rulemaking Board (“MSRB”) issued a concept release last month suggesting that market transparency trumps the direct Congressional prohibition against federal regulations...
View ArticleTN COA Tosses Fraud & Securities Claim Over “Crazy” Scam
Tennessee fraudulent misrepresentation claims – and “investment contract” claims under the State’s Blue Sky Law – fail the “reasonable reliance” requirement, where the plaintiff himself asserts it’s a...
View ArticleSecond Circuit Issues Amended Order Affirming Dismissal in Transocean
On April 29, the United States Court of Appeals entered an amended order (previously decided on March 17, 2016) that affirmed the decision of the United States District Court for the Southern District...
View ArticleFINRA to Expand Broker-Check Reporting
Richard Ketchum, the retiring CEO of FINRA, said that the regulator intends to expand the reporting available through its BrokerCheck® web tool to include relative concentrations of disciplined brokers...
View ArticleMunicipal Conduct Rule G-42 Effective June 23
The MSRB’s amended Rule G-42 becomes effective June 23, prescribing new conduct standards for municipal advisors and for the underwriters working with them. In advance of the effective date, the MSRB...
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