Fraud Archives - MasterCompliance

FINRA Enforcement: Bringing Cases Against Individual Brokers

Posted on December 13, 2022 by admin

On September 20th, FINRA released the podcast FINRA Enforcement: Bringing Cases Against Individual Brokers. This podcast provides background information on how the enforcement process works against individual registered representatives. Mr. Chris Kelly, Deputy Head of Enforcement, was the guest on the show. Below is a summary of key considerations and takeaways for Firm’s and Brokers. Type of Cases Brought Against Individual Brokers Mr. Kelly noted that there are a wide range of cases brought against an individual broker. These can include failure to report an outside business activity, private securities transactions (aka selling away from the firm), fraud, excessive and Read more about FINRA Enforcement: Bringing Cases Against Individual Brokers[…]

Regulatory Notice 22-18: Forgery and Falsification

Posted on August 26, 2022August 26, 2022 by admin

Regulatory Notice 22-18 reminds firms of their rule obligation related to forgery and falsification of records and provides Firm’s with some specific examples that they have encountered from other Firms. These examples are great tools to review against your program and audit to ensure that your Firm is meeting rule requirements. What is Forgery or Falsification of a Record? Forgery occurs when one person signs or affixes, or causes to be signed or affixed, another person’s name or initials on a document without the other person’s prior permission. Falsification occurs when a person creates a document or entry in a Read more about Regulatory Notice 22-18: Forgery and Falsification[…]

FINRA Unscripted Podcast: AML Update

Posted on July 8, 2022July 8, 2022 by admin

FINRA recently released a podcast AML Update: The Latest Trends and Effective Practices . This podcast provides a great update on the current AML and fraud trends and best practices from Jason Foye, Senior Director of the National Cause and Finance Crimes Detection Program’s Special Investigative Unit . A few highlights from the AML update podcast: Financial Crimes Enforcement Network (FinCEN) Priorities On June 30, 2021, FinCEN posted a bulletin that set out eight priorities, focused on threats to the U.S. financial system and national security. These priorities include corruption, cybercrime (including relevant cybersecurity and virtual currency considerations), foreign and Read more about FINRA Unscripted Podcast: AML Update[…]

Reporting And Inquiry for Lost, Counterfeit, Missing, and Stolen Securities

Posted on February 18, 2022February 18, 2022 by admin

SEC Rule 17f-1 calls for the SEC or its designee, currently the Securities Information Center (SIC), to maintain records of lost, counterfeit, missing, or stolen securities. This rule was created in an effort to reduce trafficking in lost, stolen, missing, and counterfeit securities. The database of securities maintained by the SIC can only be accessed by registered BDs and other financial institutions to ascertain if securities that have come into their possession have been reported as lost, stolen, missing, or counterfeit. No Criminal Action Suspected Upon discovery of the likely loss of a security, if no criminal action is suspected, Read more about Reporting And Inquiry for Lost, Counterfeit, Missing, and Stolen Securities[…]

Filing A Suspicious Activity Report (“SAR”)

Posted on March 19, 2021April 14, 2021 by admin

The Financial Crimes Enforcement Network requires certain financial institutions to file a Suspicious Activities Reports (“SAR”) to report suspicious transactions, as detailed in their FinCEN SAR Electronic Filing Instructions. This blog will go over some of the important aspects of filing a Suspicious Activity Report.

FINRA Notice 21-03: Low-Priced Securities Fraud

Posted on March 15, 2021March 15, 2021 by admin

FINRA released regulatory notice 21-03, FINRA Urges Firms to Review Their Policies and Procedures Relating to Red Flags of Potential Securities Fraud Involving Low-Priced Securities, discussing issues with these securities offerings and fraud. Specifically, including those involving COVID-19 and cannabis related businesses, which appear to have been part of potential pump-and-dump or market manipulation schemes that target unsuspecting investors.

In the notice, FINRA states that “Low-priced securities tend to be volatile and trade in low volumes. It may be difficult to find accurate information about them. There is a long history of bad actors exploiting these features to engage in fraudulent manipulations of low-priced securities. Frequently, these actors take advantage of trends and major events — such as the growth in cannabis-related businesses or the ongoing COVID-19 pandemic — to perpetrate the fraud.”