Superveillance: Tracking the High Risk Brokers

As the broker-dealer world descends on DC for the Annual FINRA Conference this week, I wanted to return to the discussion of FINRA’s new guidance on Heightened Supervision, first discussed here.  Specifically, I’d like to click into the final point: •“ Embrace content surveillance: uncovering high risk broker activities may very well exceed the limits of […]

Continue Reading
High Risk Brokers: Can You Uncover the Information Risk?

As the Annual FINRA Conference draws closer, FINRA continues to send signals of its enforcement priorities for the balance of 2018.  As a follow-on to its January Exam Priorities Letter  FINRA has just released Regulatory Notice 18-15 “Heightened Supervision” that would require firms to adopt heightened supervisory procedures for brokers with histories of past misconduct. Among its […]

Continue Reading
Electronic Communications Tops FINRA Enforcement Issues in 2017

Financial Industry Regulatory Authority (FINRA) restitution more than doubled in 2017, according to Eversheds Sutherland’s annual analysis of reported disciplinary actions. FINRA reported restitution of approximately $66 million in 2017, an increase of 136% from the $28 million in restitution reported in 2016. In 2017 FINRA fines amounted to $73 million, a 58 percent decrease […]

Continue Reading
FCA Regulatory Priorities for 2018

On April 9, 2018, the UK’s Financial Conduct Authority (FCA) published its Business Plan for 2018/19 which highlights the key priorities for this year. This year’s priorities reflect the resources the FCA needs to prepare for withdrawal from the European Union (EU). Brexit is a key priority for the FCA as it seeks a smooth […]

Continue Reading
Regulatory Updates: Firm fined $1.3 million for supervision failures

The SEC and FINRA recently fined a brokerage firm $1.3 million for failing to supervise suspicious penny stock transactions. Last month, FINRA fined a firm $550,000 for “failing to have adequate supervisory and anti-money laundering (AML) programs tailored to detect ‘red flags’ or suspicious activity connected to its sale of low-priced securities”. Further, the SEC […]

Continue Reading
Communications Compliance Review in 2018: What All Firms Can Learn from Financial Services

The review of employee communications for possible compliance policy violations has never been more important – and more complex. The complexity is being driven by the adoption of new communications tools that offer richer, more dynamic, and more effective means of collaborating with embedded voice, messaging, and app sharing capabilities. The days of attempting to […]

Continue Reading
Regulatory Update: Former Equifax CIO Charged with Insider Trading – Texting at the Center of the Charges

The text message from the former Equifax CIO was a red flag: “Sounds bad. We may be the one breached.” Federal prosecutors charged a former Equifax chief information officer (CIO) with insider trading, for selling nearly $1 million in company stock before the public disclosure of the Equifax data breach. The former CIO of a […]

Continue Reading
Regulatory Updates: Enforcement is Heating Up Across the Regulatory Landscape

Last month, the SEC and FINRA fined several firms for failure to establish reasonably designed supervision programs to ensure compliance with applicable securities laws and regulations. Individuals were also fined for failing to comply with securities laws and regulations pertaining to electronic communications. The SEC penalized a bank $3.7 million for failing to reasonably supervise […]

Continue Reading
SEC Reveals 2018 OCIE Exam Priorities

The Securities and Exchange Commission (SEC) Office of Compliance Inspections and Examinations (OCIE) recently published its 2018 examination priorities letter. The priorities reflect certain practices and products the examiners believe may present potentially heightened risk to investors or the integrity of the U.S. capital markets. This year’s examination priorities are organized around five themes: (1) […]

Continue Reading
Social Media Triggers Ongoing Compliance Requirements

Before social media gained popularity, Registered Investment Advisers (“RIAs”) launched a website and often did little else to market their firms. In many instances, the website content remained stagnant for years. Each firm’s Chief Compliance Officer (“CCO”) was to preapprove all content posted and to review it periodically. As RIAs now rely more on communications […]

Continue Reading