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[…]
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.
Every broker dealer has at least one thing in common – Minimum Net Capital Requirements (“MNCR”). Whether the firm has a $5,000 MNCR or a $100,000 MNCR, the firm’s FINOP must ensure that the broker dealer is at all times (including intra-day) meeting the requirements set forth by FINRA with SEA Rule 15c3-1. The minimum net capital requirement is going to be the higher of the figure set forth by FINRA based upon the type of broker dealer the firm is OR the total of the firm’s Aggregate Indebtedness. Today, let’s specifically talk about the Aggregate Indebtedness to Net Capital Read more about Let’s Talk Aggregate Indebtedness[…]
Individuals and companies desire to start a broker-dealer for many reasons including to facilitate sales, create an entry point for foreign financial institutions, or be a part of a larger financial plan. Some of the benefits to starting a broker-dealer (vs. purchasing an existing one) include saving money on due diligence, having no prior regulatory or financial issues, and the ability to customize it to fit your desired products and business lines. If you are looking for more pros and cons to starting vs. Buying a broker-dealer, read one of our recent posts on the topic “here”. If you decide Read more about Key Steps for Starting a Broker-Dealer[…]
Running a broker dealer is an expensive task these days – more regulations, hyper focus on transparency in the books and records, and studying all potential fraud risks within broker dealers. Cutting costs can seem like a daunting feat for anyone. One of the easiest ways to manage your broker dealer without breaking the bank is outsourcing your FINOP and accounting roles. To hire the best inhouse FINOP, a broker dealer will require at least an industry experienced accountant/financial officer along with a Series 27/28 licensed FINOP. In addition to salaries, the broker dealer must have benefits in order attract Read more about The Outsourced FINOP[…]