FINRA and OCIE Announce Examination Areas of Focus

Overview FINRA and OCIE each have issued their 2017 examination priorities.  Not surprisingly, there are many common subjects, including (1) high-risk and recidivist brokers, (2) senior investors, and (3) operational risks such as cybersecurity and anti-money laundering.  FINRA’s Annual Regulatory and Examination Priorities Letter covers fewer subjects than in previous years and, in contrast to … More FINRA and OCIE Announce Examination Areas of Focus

Relationship labels may be more complicated under the Supreme Court’s Salman Decision

On December 6, 2016, the United States Supreme Court (SCOTUS) issued its opinion in the much anticipated insider trading case, Salman v. United States, 580 U.S. ___ (2016). (See Happy Anniversay Newman – Part III for a summary on Salman). In a unanimous decision, SCOTUS upheld the conviction of remote-tippee, Bassam Yacoub Salman, for violating … More Relationship labels may be more complicated under the Supreme Court’s Salman Decision

Online date-seekers beware when in search of love and $$$

You may have heard the term catfish to describe someone who pretends to be someone who he or she is not by creating an online profile with a false identity, generally to pursue deceptive online romances. In the Securities and Exchange Commission’s (SEC) latest enforcement action, the defendant takes catfish to a new level by creating a pseudo-company … More Online date-seekers beware when in search of love and $$$

FINRA CEO Ketchum Speaks on Strengthening Three Key Aspects of Markets

In his testimony before the Subcommittee on Securities, Insurance, and Investments in the United States Senate on March 3, 2016, FINRA Chairman and CEO Richard Ketchum spoke about three key aspects of the markets that securities market participants and regulators alike should continually strive to strengthen: market fairness, market transparency, and market liquidity.  Chairman Ketchum … More FINRA CEO Ketchum Speaks on Strengthening Three Key Aspects of Markets

Running a Broker-Dealer Firm: What’s Culture Got To Do With It?

FINRA has placed a renewed focus on “firm culture” and its “profound influence on how a broker-dealer conducts its business,” as stated in its February targeted exam letter, titled “Establishing, Communicating and Implementing Cultural Values.” The letter aligns with FINRA’s 2016 Regulatory Examinations and Priority Letter, which states that “firm culture, ethics and conflicts of … More Running a Broker-Dealer Firm: What’s Culture Got To Do With It?

Can parties expect changes to FINRA Arbitration? Arbitrators can.

On December 16th, the Financial Industry Regulatory Authority (FINRA) posted the final report prepared by FINRA’s Arbitration Task Force, which was assigned the responsibility of reviewing FINRA’s arbitration and mediation forum for areas of improvement. The task force, formed in July 2014, consisted of 13 individuals from the public and industry sectors who met regularly … More Can parties expect changes to FINRA Arbitration? Arbitrators can.

Happy Anniversary Newman – Part II

When does a friendship give rise to personal benefit? S.E.C. v. McGinnis – order denying Defendants’ MSJ entered on Sept. 23, 2015 The SEC alleges that McGinnis, the tipper, received a personal benefit from Pugatch, the tippee, because Pugatch provided McGinnis “with a number of benefits in exchange for material nonpublic information including his friendship, … More Happy Anniversary Newman – Part II

Happy Anniversary Newman! Part I

In December 2014, the Second Circuit’s decision in U.S. v. Newman addressed two major issues that have changed the analysis in insider trading cases.  773 F.3d 438 (2d Cir. 2014).  First, it substantially reduced the potential liability of remote tippees by holding that a tippee cannot be convicted unless the tippee “knows of the personal benefit received … More Happy Anniversary Newman! Part I

SEC Staff May Begin Routine Inspections of Exempt Reporting Advisers

On November 20, 2015, the Director of the SEC’s Office of Compliance Inspections and Examinations (OCIE) stated in a speech that OCIE would begin conducting routine examinations of “exempt reporting advisers” that file with the SEC.  These remarks were made in a speech to the ABA Hedge Fund Sub-Committee during the ABA’s Business Law Section … More SEC Staff May Begin Routine Inspections of Exempt Reporting Advisers