Regulatory Risk Management Partners’ Post

The Sarna Technologies customer account open can protect your firm against this type of violation involving seniors in two ways: 1) Account application information, including suitability, is preserved in an always encrypted environment; and 2) It is impossible for a rep to tamper with account information without leaving digital fingerprints in our Audit Trail feature. Our account open feature can be deployed with our UI or you can utilize our API to build your own UI with our robust feature set, including: -Support for domestic and international accounts (W-9 and W-8BEN; localized language and currency) -Market Data Entitlement screening -Automated options trading level recommendation engine -Robust KYC (ID verify/validate; live person check; selfie match); and -Comprehensive e-signature including ID check, device info, and timestamps. #Compliance #KYC #AccountOpen

FINRA, the US brokerage industry's self-regulatory body, is facing heat for a drop in enforcement numbers. It issued 426 enforcement actions last year, and its caseload has nearly halved since its peak in 2015. Total fines were also half at $88.4m, compared to their 2016 peak of $173.8m. Political pressure is mounting, with senior politicians demanding answers on why the FINRA’s caseload has hit “the lowest levels in the agency’s history”. Is FINRA due for a shake-up? Read on to find out: https://bit.ly/4dfnqdx

Recently, the SEC Director, Division of Enforcement, Gurbir Grewal, spoke at the Securities Enforcement Forum West about the importance of cooperation with the SEC during examinations. SEC officials have spoken previously about the effects of self-reporting and cooperation on penalties levied, and this talk provides actionable content as to what is considered proper cooperation. In this release, we covered the following areas below from his speech. ❓ Why Cooperate? 📝 The Principles of Cooperation 💡 Our Conclusion on the Statements made To learn more about the information we covered above, click the link here: https://lnkd.in/ezsYxjSZ #HowToCooperateDuringSECInvestigations #SECReleases

How will you meet the requirements of the new Restricted Activities and Preferential Treatment Rule? Watch the Gen II #SEC #PrivateFund Advisor Rules Panel and stay updated on the latest insights into SEC regulations for fund #compliance regarding the Quarterly Statement Rule. Watch now: https://bit.ly/4biBeDn

Helpful insights provided below regarding how to cooperate during SEC Investigations/Examinations. #SECExams

I always enjoy some light compliance reading in the morning and this is a fine example. It seems like there further I go in my career the more my disdain for FINRA grows, and this is a prime example why. Regardless of anyone's personal thoughts about the ownership of Alpine there has to be a uniform application of laws and due process tied to any process that might/will affect a business. In the last 10 to 15 years it has become standard process for FINRA to want to put small broker dealers out of business. If you don't believe that please do go fact check the decline in BD's over the past decade. Perhaps also go check out the association of those that went out of business with career ending fines and violations applied by FINRA. With that being said though why do I care? I voluntarily gave up my registration and licensure due to their arduous review practices and never ending scare tactics regarding OBA disclosure. I care because for some really contrived reason FINRA has control of the 15C-211 process to illicit the creation of a ticker symbol for issuers that desire to trade on the OTC Markets Group. They also have oversight when it comes to an kind of corporate action, from name changes to cash dividends to mergers. Unfortunately for all my issuer clients there is no one FINRA that has any understanding of legal compliance on a state or federal level and then applies it to the issuers notification of an event. This creates unduly long processing times for events, delay in notifications, and unfortunately as I've seen far too many times damage to shareholders and impairment to their return due to unforced delays because of incompetence. I wish it weren't like this....perhaps there should be more than one main SRO to cover such a broad and expansive swath of the market. Would love to hear everyone's input! What do you guys think aaim and David V Duccini? #finra #sec #compliance #otcmarkets #ipo #goingpublic

Attention, broker-dealer friends: FINRA recently sent a message to the industry by issuing two CAT reporting AWCs in one day. Notwithstanding public comments by FINRA acknowledging that there are "tons of problems that people raise with CAT," and despite ambiguity about the what the "maximum Error Rate" is for CAT violations, FINRA is not holding back in bringing these cases -- and with hefty sanctions, to boot. Read my and Christopher J. Kelly's take at the link below. #finra #securitiesenforcement #brokerdealers

FINRA, a non-government entity, wields mass power over brokers with no real supervision from the SEC. FINRA’s investigatory and prosecutorial activities affect the careers and livelihoods of countless American citizens! Where is the oversight? https://lnkd.in/gs_mHZGu  We say that FINRA cannot have it both ways! It cannot evade the Constitution’s appointment, removal, due process, and jury trial requirements by claiming to be a mere private actor, while at the same time wielding vast, unsupervised governmental power. FINRA's lack of accountability and supervision by SEC creates a serious constitutional conflict that CANNOT be ignored.  Effective oversight is crucial, especially when entities wield considerable influence over individuals and businesses. The Court should end this pernicious and extra-constitutional system of private prosecution!

Supreme Court Ruling Against SEC Will Fuel Finra Challenges: Lawyers   The U.S. Supreme Court decided this month that when the Securities and Exchange Commission seeks civil penalties, defendants have a constitutional right to a jury trial.   That ruling—in the SEC v. Jarkesy—will likely spawn challenges to the existing system for enforcing rules for brokers and brokerages, according to lawyers who have fought against and supported Financial Industry Regulatory Authority enforcement actions.    https://lnkd.in/ezQcgm-v   "If the SEC is impacted by a ruling that defendants have a right to a jury by their peers, I don’t see why that right wouldn’t extend to Finra as well. The precedent set by the Supreme Court underscores the importance of constitutional rights in regulatory enforcement, and it’s only logical that Finra's disciplinary actions should also be subjected to the same scrutiny." ~ Damon Testaverde   #network1financial Network 1 Financial Securities, Inc. Damon Testaverde

In this issue of FINRA Facts and Trends, we discuss new FINRA arbitration statistics, a key ruling that restricts who may be deemed a "customer" under the FINRA rules, and the settlement of FINRA's first formal disciplinary action involving a firm's supervision of so-called "FinFluencers."