Category Archives: Enforcement

SEC Chairman Clayton Shares His Thoughts With the Senate

On September 26, 2017, SEC Chairman Jay Clayton delivered to the U.S. Senate Committee on Banking, Housing and Urban Affairs his first testimony as Chairman. A copy of his prepared remarks may be found here.

Mr. Clayton’s testimony was fairly broad in scope, covering a variety of issues of concern to the Committee, from the SEC’s budget request to its activity in the enforcement arena. Of interest to BDIA’s were his comments on:

  • Encouraging Initial Public Offerings and Investor Choice
  • A Fiduciary Duty for Broker-Dealers
  • Examinations of Broker-Dealers

Read More Here

Additional contributor to this post:

Lloyd S. Harmetzlharmetz@mofo.com

 

Mixed Results for FINRA’s Disciplinary Actions in First Half of 2017

A midyear analysis of the disciplinary actions reported by FINRA from January through June 2017 indicates:

  • Certain program areas and restitution are up, but fines and the number of disciplinary cases are significantly down
  • FINRA appears to be focusing on more “nuts and bolts” issues like trade reporting, record retention, and supervisory policies and procedures
  • Despite an overall reduction in fines and the number of disciplinary actions, firms should still concentrate on core issues like suitability and books and records, among others

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Additional contributor to this post:

Brian L. Rubinbrianrubin@eversheds-sutherland.com

 

A Record-Breaking Year for FINRA in 2016; What May Come in 2017?

2016 will be remembered as an historic year: the Olympics, the Chicago-Cleveland World Series, and the presidential election. In the regulatory world of FINRA, there was also an historic year as FINRA continued its trend of ordering significant fines, shattering its
previous record set in 2014. If firms and their representatives were not paying attention to this trend, they should be now. Although some have speculated about a reduction in the SEC’s Enforcement program with the new administration, FINRA shows no signs of slowing down. By analyzing FINRA’s 2016 sanctions and cases, including the issues that resulted in the most significant fines and emerging enforcement trends, what predictions can we make about key issues for FINRA for 2017 and beyond?

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Additional contributor to this post:

Brian L. Rubinbrianrubin@eversheds-sutherland.com

FINRA Holds Regulator Forum on Distributed Ledger Technology

FINRA recently held a Blockchain Symposium which included a Regulator Forum with representatives from FINRA, OCC, CFTC, the Federal Reserve  and the SEC.  The regulators discussed the work they have undertaken to assess the use of DLT in the financial services industry, and the regulatory considerations associated with potential uses of DLT. The Symposium follows FINRA’s publication of a report earlier this year discussing the implications of DLT for the securities industry and soliciting comments from market participants.

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Additional contributor to this post:

Issa J. Hanna,  issahanna@eversheds-sutherland.com

Senior Investors Focus of New “Principal Consideration” in FINRA Sanctions

Last month, FINRA’s National Adjudicatory Council (NAC) introduced new Sanction Guidelines which allow the NAC and FINRA staff to take into consideration the “undue influence” of registered individuals over vulnerable customers in determining appropriate sanction levels. The last update to the Guidelines occurred approximately two years ago, and included changes related to unsuitable recommendations and misrepresentations. Last month’s changes to the Guidelines provide for the first time a “principal consideration that analyzes whether a respondent has exercised undue influence over a customer.” Now listed as a specific factor for adjudicators and FINRA staff to consider in determining appropriate sanctions is  “[w]hether the respondent exercised undue influence over the customer.”

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Additional contributors to this post:

Bruce M. Bettigole, brucebettigole@eversheds-sutherland.com

Sarah Razaq Sallis, sarahsallis@eversheds-sutherland.com