FINRA Lawyer Blog

According to former Securities and Exchange Commission Chair Mary Jo White, the SEC insufficient examination of registered investment advisors is a “disaster waiting to happen.” Without adequate oversight, misconduct at small advisory firms could be building up for years. While FINRA and state regulators vet half of all registered broker-dealers annually, the SEC only manages…

In a move that could be categorized as ‘seismic,’ Morgan Stanley has decided to quit the Protocol for Broker Recruiting. Originated in 2004, the document created a methodology to engineer the departure of brokers from one firm to join another. Since then, it has protected departing brokers from litigation and temporary restraining orders, and ensured…

Much has been said about the Trump’s administration effect on the SEC’s regulatory activities. Now, hard data confirms what we all suspected: under Trump, the Securities Exchange Commission has brought fewer enforcement actions and reduced its financial sanctions. A new study by a Georgetown University professor, covering fiscal year 2017, revealed that the SEC brought…

FINRA recently filed a complaint against a South Carolina-headquartered broker-dealer that allegedly charged exorbitant fees in connection with saltwater disposal well investments. The defendant, Sandlapper Securities, is a mid-size firm that employs about 60 brokers across its 13 locations. According to FINRA, Sandlapper “participated in a fraudulent scheme and defrauded investors by selling investments in…

A FINRA arbitration panel has just awarded James L. Springer Jr.; a Sarasota investment adviser, $3 million in damages, to be paid by his former employer, UBS. Springer, who managed $350 million in client assets during his 12 years with the company, claims UBS defamed him in a desperate attempt to keep his clients after…

At a recent Securities Enforcement Forum in Washington DC, Stephanie Avakian, co-director of the SEC’s Division of Enforcement, discussed the agency’s future priorities. Avakian emphasized that the mission of the Enforcement Division, to protect investors, will remain unchanged, but she announced a slight shift in focus areas and resource allocation. The Division of Enforcement official…

In a recent report, the Wall Street Journal said FINRA’s investments are underperforming. The self-regulatory organization boasts a $1 billion yearly budget, and it easily collects over $100 million per year through the imposition of fines. According to WSJ journalists, throughout its existence, FINRA’s $1.6 billion investment portfolio has yielded $440 million less than what…

Aspiring brokers will no longer need a firm to sponsor them in order to take FINRA’s competency exams. The Securities and Exchange Commission has just approved FINRA Regulatory Notice 17-30, which will make this and other changes effective within a year. According to FINRA, the rule change aims to: adopt consolidated FINRA registration rules; restructure…

The North American Securities Administrators Association (NASAA) has just released its yearly Enforcement Report. Although NASAA is an international association of all state, provincial and territorial securities regulators in the United States, Canada, and Mexico, the annual report is focused on US jurisdictions. According to data included in the document, there were more enforcement actions…

The SEC has accused two former Alexander Capital LP brokers, William Gennity and Rocco Roveccio of engaging in unlawful trading and deception that caused their customers to lose hundreds of thousands of dollars, while they earned a comparable amount in fees. Gennity and Roveccio both worked at Alexander Capital from mid 2012 till October 2014.…