FINRA Lawyer Blog

“Arbitrators have a unique, distinct role in ensuring that customer dispute information is expunged from the CRD system only when it has no meaningful investor protection or regulatory value.” FINRA (September, 2017) In a new push for closer scrutiny over expungements, FINRA has just updated its Notice to Arbitrators and Parties on Expanded Expungement Guidance.…

FINRA announced it has just fined C.L. King & Associates $750,000. According to the Regulatory Authority´s decision, the broker-dealer has negligently made “material misrepresentations and omissions to issuers in connection with the firm’s redemptions of debt securities on behalf of a hedge fund customer.” This was allegedly done in connection with the hedge fund customer´s…

Once in a while, regulators and courts take actions that have no precedent, but which may influence justice over time. That is the case of a recent ruling from a Florida federal judge, who ordered a defendant to disclose that he had “violated commodity laws” whenever he writes or speaks about commodity trading in the…

During a recent Financial Services Subcommittee oversight hearing, both Democrat and Republican lawmakers raised concerns before FINRA CEO Robert Cook. Some of the issues discussed were the Regulatory Authority’s standing as a private entity and its handling of fine proceeds, which hit a record $173 million in 2016. One of the main criticisms voiced by…

The last few years have seen an improvement in economic activity in the US. After median family net worth remained stagnant between 2010 and 2013, house prices are now rising, corporate equity prices are also on the rise. But how does that translate in terms of traded stock ownership? In order to better understand the…

Ironridge Global Partners LLC has agreed to pay $4.4 million in disgorgement to settle claims that it incurred violations of the Exchange Act when its subsidiary Ironridge Global IV distributed billions of microcap shares without being a registered broker. According to the SEC order, Ironridge violated Section 15(a) of the Exchange Act, which “prohibits a…

Over the course of 2016, FINRA expelled 24 firms from membership and fined offenders for a total of $176 million. The largest fine amounted to $25 million, paid by MetLife Securities over negligent misrepresentations and omissions in connection with variable annuity replacements. A total of $27,9 million from monetary sanctions corresponded to customer restitutions. In…

In a speech delivered at Georgetown University, FINRA CEO Robert Cook expressed the Regulatory Authority’s intent on helping brokerages identify and supervise brokers with a history of disciplinary action. From now on, FINRA is going to look very closely at how firms hire and supervise high-risk brokers, Cook explained. Firms should have heightened supervision in…

The SEC recently asked a federal judge to freeze $5.4 million of Avalon FA Ltd.’s funds, on account of its practice of “layering.” A Seychelles investment firm run out of Ukraine, Avalon allegedly engaged in illegal market manipulation. Layering, in the SEC’s words is, “a scheme in which orders are placed but later canceled after…

Raiding, hiring groups of brokers from a competitor, happens frequently in the securities industry giving rise to complex disputes and damage claims. Whether your firm is the victim or the accused raiding entity, you will need to understand these basics: Every circumstance has its own unique facts. As such, the information here should be considered…