FINRA Dispute Resolution filed with the SEC a proposed change to Code of Arbitration Rules 12214 and 12601 (and industry Rules 13214 and 13601) to increase late cancellation fees from $100 to $600 per arbitrator and expand the notice period for late hearing cancellations from 3 to 10 days. See SR-FINRA 2015-003 (filed SEC Feb. 5, 2015). Thomas K. Potter, III (tpotter@burr.com) is a partner in the Securities Litigation Practice Group at Burr & Forman, LLP. Managing Partner of the Nashville office, Tom is licensed in Tennessee, Texas and Louisiana. He has over 28 years' experience ...
The SEC and FINRA each issued February 3 cyber security "alerts" summarizing last year's sweep exams and pointing out the obvious. In two parts, the SEC's press-release covered the results of the Commission's 2013-2014 sweep exams and an investor bulletin. SEC Press Release 2015-20, here. The Commission's Office of Compliance Inspections and Examinations ("OCIE") conducted a "sweep exam" - or wide industry survey on the subject among broker-dealers and investment advisers- during 2013 and 2014. The good news is that a wide majority of them have have information security ...
On January 29, the Commission dismissed its insider-trading suit against Canadian analyst Jordan Peixoto in connection with his purchase of puts on the stock of Herbalife in advance of a negative hedge fund presentation on the company. The SEC instituted proceedings against Peixoto last September in its administrative forum - something it could not have done before Dodd-Frank against the non-registered Canadian-citizen research analyst. In the Matter of Jordan Peixoto, AP File No. 3-16184 (SEC Sept. 30, 2014)(OIP here) Dodd-Frank reforms expanded the availability of the ...
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 made numerous, and significant, changes to the Securities and Exchange Commission's regulatory powers particularly with respect to regulated professionals in the securities industry. But its broad sweep did not ignore non-regulated persons either. And, the significance of these changes to non-regulated individuals should not be underestimated.
- 929P(a) of Dodd-Frank granted the SEC authority to initiate the administrative proceedings against both regulated and non-regulated persons and to seek ...
The SEC's Office of Compliance Inspections and Examinations ("OCIE") released its 2015 Exam Priorities January 13. Director Andrew Bowden's annual list details OCIE's subject of focus for the coming year. The hot topics for 2015 include: For Retail securities sales: - The "retail-ization" of private funds, illiquid investments and structured or other alternative products that pose extra risks when complex products are sold to "mom and pop" investors; - Fees & "reverse churning" (a fixed asset-based fee on accounts with little or no activity) - when account or commission ...
The Financial Industry Regulatory Authority ("FINRA") released its 10th annual Exam Priority Letter earlier this week (Jan. 6, 2015). The so-called "Errico Letter" advises broker-dealer member firms of the operational risks the regulator expects to focus on in its examination (and enforcement) program. Moving a little closer to a principles-based regulatory approach than the usual "hot issue" laundry list from past years, this year's Letter first addresses five key areas of concern: 1. Alignment of Customer/Firm Interest 2. Standards of Ethical Behavior 3. Strong ...