On Dealbreaker last week, Bess Levin hilariously reported former baseball player Lenny Dykstra’s release from a California prison after his guilty plea and sentencing for three felony counts – bankruptcy fraud, concealment of assets, and money laundering. As Levin noted, with his new free time, Dykstra might be available to weigh in on your investment… Continue Reading
Category Archives: Broker-Dealers
Subscribe to Broker-Dealers RSS FeedThe SEC Does Not Care about Your FINRA Document Request
Posted in Broker-Dealers, FINRAIf you are a broker-dealer or a registered representative at one, you sign on for some meddling by FINRA. The self-regulatory organization is responsible for overseeing your securities business and even for your outside business activities. So if FINRA asks you for documents related to those activities, you pretty much have to turn them over. … Continue Reading
SEC Highlights Compliance and Ethics for Broker-Dealers
Posted in Broker-Dealers, ComplianceOn Tuesday the SEC held a National Compliance Outreach Program for Broker-Dealers at an open meeting at its D.C. headquarters. The first panel – titled The Role of Compliance and Ethics – was nominally targeted to broker-dealers, but its lessons could be applied to any businesses under significant regulatory scrutiny. The participants were: Merri Jo… Continue Reading
SEC Ramps Up Its Private Equity Parade
Posted in Broker-Dealers, Investment Advisers, Non-scienter-based Violations, Private EquityBruce Karpati, chief of the SEC’s Asset Management Unit, promised us several weeks ago that enforcement actions against private equity firms were about to heat up. He wasn’t kidding. Last Monday, the SEC filed two sets of settled administrative proceedings against private equity firms. We’ll discuss one of them today, and the second in a… Continue Reading
SEC Charges Indian Firms with Acting as Unregistered Broker-Dealers
Posted in Broker-Dealers, Non-scienter-based ViolationsOn November 27th, the SEC charged four Indian financial services firms with acting as unregistered broker-dealers in the United States. The firms were accused of providing brokerage services to institutional investors in the U.S. without registering with the SEC as required by Section 15(a) of the Exchange Act. The SEC censured the firms, who paid… Continue Reading
Saturday Links
Posted in Accounting Fraud, Broker-Dealers, ComplianceGood morning! Some stories for you to read today: The Legal Times reports that Harvey Pitt says the SEC has been saddled with an impossible job in writing rules to implement the JOBS Act. At an ABA conference in D.C., he said, ”We’ll see some sort of scandal rise and of course everyone will blame the… Continue Reading
Stories Worth Reading This Morning
Posted in Broker-Dealers, FCPA, FINRAAmong the stories you should consider reading today: FINRA’s Susan Axelrod announced at a PLI panel on Wednesday that FINRA is reviewing conflicts of interest at 14 broker-dealers. The review seems to be geared toward being sure that registered representatives keep their focus on suitability of the products sold to their customers. This article suggests… Continue Reading
NASAA Identifies Top Broker-Dealer Compliance Violations and Best Practices
Posted in Broker-Dealers, FINRAOn Sunday, the North American Securities Administrators Association released its list of broker-dealer compliance violations and best practices to avoid those violations. The list is based on a compilation of 236 examinations by state securities examiners from 24 jurisdictions around the United States. The exams were conducted in the first half of 2012 under the… Continue Reading
FINRA Reminds World about Global Research Settlement
Posted in Broker-Dealers, FINRARemember the Global Research Settlement? It has been somewhat in the news recently. You might recall that it involved ten huge banks and the, uh, symbiotic relationship between those banks’ research and investment banking arms. The pattern that had developed worked like this: equity analysts published favorable coverage of a publicly traded company’s stock, and… Continue Reading
FINRA Expels Biremis Corp. for Anti-Money Laundering Abuses
Posted in Broker-Dealers, FINRA, Non-scienter-based ViolationsOn July 30th, FINRA expelled broker-dealer Biremis Corporation and permanently barred Biremis’s CEO, Peter Beck, from association with any FINRA member firm in any capacity. FINRA found Biremis and Beck liable for a host of violations. FINRA alleged that among other things, Biremis failed to implement an adequate anti-money laundering (“AML”) program, failed to maintain… Continue Reading
3½ Thoughts about the Consolidated Audit Trail
Posted in Broker-Dealers, FINRA, Insider Trading, SEC StructureOn July 11th, the SEC adopted Rule 613, a rule that requires national securities exchanges and FINRA “to jointly submit a comprehensive plan detailing how they would develop, implement, and maintain a consolidated audit trail that must collect and accurately identify every order, cancellation, modification, and trade execution for all exchange-listed equities and equity options… Continue Reading
SEC and N.C. Securities Division Join Forces on Alleged Ponzi Scheme
Posted in Broker-DealersAs you probably know by now, Ponzi schemes, once rarely touched by the SEC’s Enforcement Division, have become fairly commonplace. It now appears that the SEC and the North Carolina Securities Division have teamed up in addressing one, or at least have taken parallel paths in doing so. In the SEC’s complaint, filed on April… Continue Reading
SEC Charges AXA Advisors with Failure to Supervise
Posted in Broker-Dealers, Investment Advisers, Non-scienter-based ViolationsThe SEC has brought two failure-to-supervise cases in the last several days. I’ll cover both in the order of their release. The first of this duo was against AXA Advisors, which failed to supervise a registered representative with the comically villainous name of Leo T. Buggy. Buggy operated out of a single-representative office in Rock… Continue Reading
SEC Targets Insider Trading Compliance Failures
Posted in Broker-Dealers, Compliance, Insider Trading, Non-scienter-based ViolationsIn light of Cady’s recent IA compliance gala celebration, I thought I would spend a post discussing In re Janney Montgomery Scott LLC, Admin. Proc. File No. 3-14459 (July 11, 2011), a compliance matter involving a broker-dealer. The case was based in Section 15(g) of the Exchange Act, which requires all registered broker-dealers to establish, maintain,… Continue Reading