Compliance, Enforcement, Regulatory, Standard of Care

Securities Regulators Focus on Forgivable Recruitment Loans/Bonuses, Social Media Influencers, and Rescission Offers

June 14, 2021 Lauren C. Jackson Leave a comment

In recent weeks, we have observed significant new developments in securities regulation related to two enforcement actions by the Commission and an unexpected (and, to our knowledge, unprecedented) new rule adopted by a state securities regulator. First, the Commission has published enforcement actions against registered investment advisers (“RIAs”), involving: (a) failure to make conflicts-related disclosures about payment of forgivable recruitment loans/bonuses; and (b) failure to comply with Rule 206(4)-3 (the “Solicitation Rule”) when using social media influencers acting as referral sources. Second, the Tennessee Securities Division has fundamentally changed the process for issuers and broker-dealers attempting to shield themselves from civil liability arising from unregistered, non-exempt securities offerings through rescission offers.

Compliance, Enforcement, Regulatory, Standard of Care

DOL Weighs In With Cybersecurity Guidance, FINRA Issues Reminders on Options and Predispute Arbitration Agreements, NASAA Releases Annual State Advisers Report, Cayman Extends CRS Compliance Form Deadlines

June 8, 2021 Cari Hopfensperger Leave a comment

June Regulatory Updates from Cari Hopsfenperger at Hardin Compliance Consulting LLC.

Topics include:

DOL issues Cybersecurity Guidance — The DOL guidance was published in three separate pieces: Tips for Hiring a Service Provider with Strong Cybersecurity Practices, Cybersecurity Program Best Practices, and Online Security Tips for Participants and Beneficiaries. Contributed by Glenn R. Skreppen, Senior Compliance Consultant
Updates to State Senior Laws & Resources — The law firm of Bressler, Amery and Ross, has created and continues to update its Senior and Vulnerable Investors Issues map, with summaries of the requirements for all 50 states. Contributed by Carolyn W. Mendelson, Senior Compliance Consultant
Form ID Updates
NASAA Annual Report on State Registered Advisers
2021 Cayman CRS (and FATCA) Updates
Do Your Options Procedures Need Work?
Can You Pass This Quiz Regarding the Use of Predispute Arbitration Agreements?
SEC Charges Broker-Dealer for Failing to File SARS

InSecurities Podcast — It’s All About Connecting: The Value of PLI’s IA/BD Programs

June 7, 2021 Clifford E. Kirsch, Editor Leave a comment

Thanks to Kurt Wolfe and Chris Ekimoff for having me as a guest on the lastest installment of PLI’s inSecurities podcast. As someone who tunes in regularly, it was a pleasure for me to do. I enjoyed chatting about broker-dealer and investment adviser regulatory issues, my work with PLI including the upcoming live webcast Securities Law and Practice 2021: How the SEC Works on June 28.

To hear this episode, and other episodes, click here.

Compliance, Enforcement, Regulatory, Standard of Care

We are not Amused: The Crown and SEC and FINRA Enforcement Matters from April 2021

June 7, 2021 Clifford E. Kirsch, Editor Leave a comment

This month’s securities enforcement article uses the television show “The Crown” as its primary source of inspiration in memory of Prince Philip, Duke of Edinburgh, who died on April 9, 2021; in awe of Oprah’s timing, interviewing skills, ability to get an interview; and out of respect for the Queen, “Her Majesty Elizabeth the Second, by the Grace of God, of the United Kingdom of Great Britain and Northern Ireland and of Her other Realms and Territories Queen, Head of the Commonwealth, Defender of the Faith,” and the Prime Ministers who served under her. Please note that, as far as we know, “The Crown” did not involve investments in securities. . . Nonetheless, the Netflix television show does involve rules and codes of conduct; intrigue and misdirection; punishment and praise; drama and comedy; and good and evil.

Read more here.

Regulatory, Standard of Care

FINRA’s diversity and inclusion efforts

June 1, 2021 Clifford E. Kirsch, Editor Leave a comment

FINRA has recently taken steps to advance diversity and inclusion in the broker-dealer industry, including issuing Regulatory Notice 21-17, on April 29, 2021, seeking comments. FINRA stated that it is committed to supporting diversity, inclusion and equal opportunity efforts by the industry. The request for comment noted that regulatory agencies such as FINRA have an opportunity to evaluate how their rules and actions may have unintended disparate impacts on those within the industries they regulate and how they may unintentionally impede diversity and inclusion. In connection with these efforts, FINRA requested comments by June 28, 2021 “on any aspects of our rules, operations and administrative processes that may create unintended barriers to greater diversity and inclusion in the broker-dealer industry or that might have unintended disparate impacts on those within the industry.” Subsequently, on May 20, 2021, FINRA chair, Eileen Murray, participated in a virtual fireside chat at FINRA’s Annual Conference with FINRA CEO, Robert Cook, during which Ms. Murray discussed her hopes to see more accountability and standardization in the reporting of diversity and inclusion efforts within firms in the industry, and that tying executive compensation to diversity goals would make a “world of difference.”

Read more here.