Safeguarding From Fraudulent Activity At any given time, natural disasters are occurring in various locations around the country. These types of situations are ripe for fraudulent activities. Bad actors surface around every corner, and it is imperative that your broker dealer does not become a victim of these criminals. The Financial Industry Regulatory Authority (“FINRA”) defines a bad actors as someone “who seeks to evade regulatory requirements and harm investors for their own personal gain.” A bad actor can show up in many ways and forms. Several red flags include: Someone within your broker dealer may receive an email requesting Read more about Safeguarding From Fraudulent Activity[…]
Broker dealers, specifically the Chief Compliance Officer (“CCO”), are required to review their firm’s compliance programs and procedures at least annually to ensure that all compliance areas are working in accordance with the rules and regulations set forth by the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority (“FINRA”). Per the Securities Exchange Act of 1934 under rule 17a-14, one area of review for broker dealers who maintain retail clients is Form CRS, the customer relationship summary. Form CRS contains various information regarding the broker dealer that is important for retail clients to know. Over the past Read more about Form CRS Observations[…]
In March 2023, the Securities and Exchange Commission (“SEC”) released an alert article with some observations that they have seen when examining newly registered firms. Note that these alerts are not rules or regulations of any regulatory authority. However, investment advisory firms and broker dealers can garner many important takeaways that may assist the firm during an examination. It is important for any new firm – whether broker dealer or registered investment advisor – to start communicating and engaging with its regulatory contacts. Having an open line of communication can provide value to investment advisors and/or broker dealers in building Read more about Exam Observations for New Firms[…]
When a broker dealer hears the words “annual audit season”, it can feel like the initial effects of hay fever or pollen season hitting you smack in the face. It is not fun. You may break out in sweats, have night terrors, or worse yet, not have a great understanding of the necessity of an annual audit. Two of the most important aspects of annual audit season are as follows: having a great financial bookkeeper and having communicative Financial Operations Principal (FINOP). With these two professionals in your corner, your broker dealer should be able to rest easy during this Read more about Annual Audit Season[…]
On September 22, 2022, the Securities and Exchange Commission announced charges against 15 wall street broker-dealers and one affiliated investment adviser for widespread and longstanding failures by the firms and their employees to maintain and preserve electronic communications during January 2018 through September 2021 review period. You can read the commissions summary and links for all 15 orders here. Below are some of the key finding and takeaways. Attestations Alone Don’t Protect the Firm What’s key about these charges is that many of the Firm’s had procedures, training and even attestations in place for all Associated Persons to document and Read more about Electronic and Technology Takeaways from SEC’s Billion Dollar Penalties[…]
This is a summary of a recent FINRA podcast on Membership Application Program.