FINRA’s newly revised Sanction Guidelines, effective immediately, signal that the upward trend in sanctions against broker-dealers is likely to continue.
The Sanction Guidelines, which establish the range of sanctions that FINRA may impose in formal disciplinary proceedings, affect several specific types of violations, as well as the principles behind levying sanctions and the overall levels of monetary sanctions. The Guidelines are also meant to catch up to the sanctions that FINRA actually is levying; as FINRA stated, in revising the guidelines, it is seeking to “harmonize the Sanction Guidelines with the current state of the cases in this area.”… Read more
With Chair Mary Jo White in her second year at the helm, the Securities and Exchange Commission showcased its efforts, improvements, and enforcement successes at this year’s SEC Speaks Conference. The Commission highlighted that it brought a record number of cases—755 enforcement actions—in fiscal year 2014, and obtained $4.1 billion in monetary relief. The Commission continues to emphasize its increased use of data analytics in both its regulatory efforts and enforcement investigations. As usual, the Commission, and the Division of Enforcement in particular, used the Conference to present their case that the SEC is firing on all cylinders.
Insider Trading … Read more
An SEC cybersecurity sweep examination by the SEC’s Office of Compliance Inspections and Examinations (OCIE) found that 88 percent of the broker-dealers (BDs) and 74 percent of the registered investment advisers (RIAs) they visited experienced cyber-attacks directly or indirectly through vendors, the SEC reported in a February 3, 2015 Risk Alert.
The sweep found that while the vast majority of all BDs and RIAs have adopted written information security policies, the SEC staff found some gaps in cybersecurity protection among many firms. BDs and RIAs will find the report useful reading to help them learn how they compare to their … Read more
In May 2014, the SEC approved FINRA’s proposed amendments to Rule 5110, commonly called the Corporate Financing Rule. The Corporate Financing Rule addresses commercial fairness in underwriting and other arrangements for the distribution of securities. Rule 5110 provides for review by FINRA of underwriting or other arrangements in connection with most public offerings in order to enable FINRA to assess the fairness and reasonableness of proposed underwriting compensation and arrangements. In addition, the underwriters of an offering must comply with a variety of substantive provisions in Rule 5110, even if the offering is exempt from filing.
Among other changes, the … Read more