The Compliance Digest

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FINRA Finds Firm’s Supervision of OBAs Inadequate

A firm from Kirkwood, Missouri was censured and fined $20,000 due to the entry of findings that the firm’s supervision of its registered representatives’ outside business activities was inadequate. A lower fine was imposed after considering, among other things, the firm’s revenue and financial resources. Read More


Ketchum’s Top 10 Quotes from the FINRA Conference

Compliance isn’t always the most exciting topic at the water coolers, but when you get more than 1,000 industry professionals in a room talking about regulation, things start to get interesting. If you didn’t get the opportunity to join us at the FINRA conference this year, don’t worry, we have Richard Ketchum’s top 10 quotes here. Read More


Senior Helpline Returns $1.3 Million in First Year

Since FINRA debuted its Securities Helpline for Seniors a short year ago, the self-regulator has claimed to have helped return more than $1.3 million in voluntary reimbursements to elderly Americans.

To date, the helpline's staff has answered over 4,200 calls, referred more than 200 cases to state, federal and foreign regulators (in instances where it lacked jurisdiction), and made more than 70 referrals to Adult Protective Services in 15 states under mandatory reporting laws. Read More


Firm Fined $875K for Insufficient Technology

A firm from Los Angeles, California was censured and fined $875,000 due to the entry of findings that its supervisory systems and procedures and risk management controls were not reasonably designed to supervise and manage the risks of its market access (MA) business involving thousands of foreign-based traders, and therefore, could not reasonably monitor, detect and prevent potentially manipulative activity. Read More


AML Regulation: What FINRA is After

In a speech at the SIFMA AML and Financial Crimes Conference earlier this month, FINRA’s Executive Vice President of Enforcement, Bradley Bennett, reminded firms of the fundamental characteristics that make up a strong AML program, citing several recent enforcement cases to help drive home his point. Bennett centered his discussion on culture and risk most specifically and how focusing on these areas can help firms better prepare for today’s AML challenges. Read More

is complete-compliance-possible

Is Complete Compliance Possible?

In Homer’s epic poem, the Odyssey, Odysseus and his crew are faced with the impossible choice of either sailing closer to Charybdis, a whirlpool capable of sinking their entire ship, or alternatively, to Scylla, a sea monster equally as fatal. Odysseus’ dilemma sprang to mind the difficult decisions compliance officers face every day, sometimes being forced to choose between the lesser of two evils. Read More


Rep Barred for Stealing $100,000 from Elderly Client

A representative from Salem, Oregon was barred from association with any FINRA member in any capacity due to the entry of the findings that he converted $100,000 from an elderly customer and used the funds to repay his family and personal debts, and to trade securities on his own behalf. Read More

FINRA lawsuit

Broker Sues FINRA Over Enforcement Jurisdiction

In a complaint filed last Tuesday in Maryland federal court, an Arizona-based broker-dealer and three of its top officials are suing FINRA in response to a disciplinary action it took against the firm, claiming that the self-regulator was outside its realm of authority. According to the report, Scottsdale Capital Advisors Corp. was reprimanded back in June for the sales of unregistered penny stocks. Read More


How to Avoid Conflicts of Interest at Your Firm

While FINRA’s definition of conflicts of interest is black and white, many firms and individual representatives are unable to pull themselves out of the grey zone. With over fifteen violations reported last month alone, the question now becomes what is it about outside business activities and private securities transactions most specifically, that continue to cause countless violations. Are the representatives failing to communicate or is the firm failing to properly outline requirements and ramifications? Read More


Tips for Compliance Spring Cleaning

This is one of those times where you should "do as I say, not as I do" because nobody would ever accuse me of being a clean freak. Seriously, no one - but as I sit here researching “spring cleaning best practices” (a girl can dream, can’t she?) I can’t help but think that some of these tips could, in some form or another, apply to organizing the chaos that can be compliance. So, without trying to sound too much like Martha Stewart, provided are five practical steps towards spring cleaning your compliance program. Read More

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