The messages are clear. Sales practice concerns, fraud, and operational issues related to the COVID-19 pandemic have arrived. Compliance professionals who are responsible for the surveillance and review of targeted areas of the compliance program should understand what may be coming down the pipe and ensure that their programs are sufficiently flexible to identify potential red flags.
On May 23, 2019, the SEC, NASAA, and FINRA published a year-end review of the Senior Safe Act which became federal law one year ago. In doing so, they also issued a Fact Sheet to help raise awareness with financial institutions and describe how the Act’s immunity provisions work.
FINRA has recently received notice from several FINRA member firms indicating that they have been victims of imposter websites designed to mimic their actual websites with the end goal of committing financial fraud.Read More…
[Continued from What is an Initial Coin Offering (ICO)? – Part I]
Online Platforms that Facilitate Trading in ICO Tokens are Not Registered Exchanges
There are no ICO platforms currently registered as exchanges. Further, the SEC has stated that it neither regulates these platforms as exchanges nor reviews the digital assets that may be listed or traded on these platforms. Many fraudulent platforms refer to themselves as exchanges to provide a sense of legitimacy and make investors assume they are regulated entities or meet the regulatory requirements and standards of a national securities exchange.
Digital assets such as cryptocurrencies, as well as other crypto coins and tokens, may be offered to investors in the form of an Initial Coin Offering (ICO). But what is an ICO? And why are they such a regulatory hot topic in the securities industry currently?
Cryptocurrency (also spelled crypto currency) is everyone’s new favorite hot topic. Even if you’ve done no research into the topic, you’ve probably heard of the most (in)famous cryptocurrency: Bitcoin. But what are cryptocurrencies? And how are they affecting the securities industry?
FINRA has recently announced the SEC approval of new Rule 2165 and amendments to FINRA Rule 4512 to address a longstanding problem within the securities industry: the financial exploitation of senior investors. “These rules will provide firms with tools to respond more quickly and effectively to protect seniors from financial exploitation.Microsoft Compatibility Telemetry This project included input and support from both investor groups and industry representatives and it demonstrates a shared commitment to an important, common goal – protecting senior investors,” said Robert W. Cook, FINRA President and CEO. Read More…
FINRA recently filed proposed new regulations regarding broker-dealer compliance with the SEC to: (1) amend FINRA Rule 4512 (Customer Account Information) to require member firms to make reasonable efforts to obtain the name of and contact information for a trusted contact person for a customer’s account; and (2) adopt new FINRA Rule 2165 (Financial Exploitation of Specified Adults) to permit FINRA registered broker-dealers to place temporary holds on disbursements of funds or securities from the accounts of specified customers where there is a reasonable belief of financial exploitation of these customers.
On June 27, 2016, the Securities Exchange Commission (SEC) has issued an alert for investors to be careful with any communications seemingly sent from the SEC. Government impersonators are targeting victims of previous frauds.
These impersonators are sending official-looking documents to investors, often claiming that they can help the investor recover their investment-related losses. But, of course, the investor must pay a fee first. Usually, this fee is disguised as some sort of tax, deposit, or refundable insurance bond that the investor must pay. Read More…