The Sixth Circuit recently affirmed that failure-to-supervise claims against a brokerage firm over outside business activities it knew nothing about nevertheless were arbitrable under FINRA Rule 12200(2) as "arising in connection with the business activities of the member" firm.
The firm's representative worked together with an outside financial advisor and others to divert a firm customer's assets from an outside bank account to a fraudulent outside business activity. The customers' funds transferred into the brokerage account, out to a bank account and from there to the ...
The Sixth Circuit Court of Appeals today dismissed a suit by the Tennessee, Georgia and New York Republican parties challenging the constitutionality of an MSRB extending pay-to-play prohibition to municipal advisors. The Court held the GOP lacked standing to challenge the rules.
MSRB Rule G-37 prohibits pay-to-play practices in connection with the issuance of municipal securities. It's been in place since 1994 and survived prior court challenges.
In Dodd-Frank, Congress mandated a municipal-advisor registration and regulatory regime to reach those advisers in the ...