arbitration-iq

Compliance and Regulatory Authority Sander Ressler Launches Arbitration IQ

Tue, 28 Oct 2025 00:12:40 GMT

Arbitration IQ provides expert testimony to securities law attorneys, claimants, respondents and regulators in actions involving securities law. The firm is founded and led by Sander Ressler, who ranks among the nation’s most sought-after securities law expert witnesses. He has worked on more than 600 arbitration cases, provided testimony in 150 hearings and worked with more than 70 law firms. Learn more at: www.arbitrationiq.com.

https://www.prnewswire.com/news-releases/compliance-and-regulatory-authority-sander-ressler-launches-arbitrationiq-302575410.html

Compliance and Regulatory Authority Sander Ressler Launches Arbitration IQ

Judge OKs release of $400 million to besieged GPB investors - InvestmentNews

Mon, 21 Apr 2025 23:51:13 GMT

A federal judge in Brooklyn last week approved the release of $400 million in funds to some of the beleaguered investors in GPB Capital Holdings who have not seen a nickel or returns since 2018, when the private placement investment scheme began to unravel.

Meanwhile, the sentencing of two top GPB executives, founder David Gentile, and broker-dealer and sale chief Jeff Schneider, was scheduled for this week but has been moved to May, according to court filings.

Last August, a jury in federal court in Brooklyn found Gentile guilty of five counts of fraud and Schneider three. The federal government’s charges stemmed from their management of GPB Capital Holdings, which was founded in 2013, GPB Capital.

The money manager sold its high risk private placements through dozens of independent broker-dealers and five years later had raised $1.8 billion from wealthy clients looking for yield in a decade ago when interest rates were next to zero.

Investment News

Meanwhile, GPB senior executives' sentencing for fraud pushed to May.

Convicted of fraud, GPB executives object to plans to return money to investors - InvestmentNews

Wed, 19 Feb 2025 23:58:49 GMT

Investors in high-risk private placements managed by GPB Capital Holdings have not seen any return from their investments since 2018, the last time any of the six funds paid out distributions to clients.

After years of court battles and delays, that could be changing.

In January, a court-appointed receiver in charge of distributing assets to 17,000 investors who bought $1.8 billion of GPB limited partnerships starting in 2013 submitted a plan to begin return money to investors.

There will be winners and losers among the GPB investors waiting to get money back.

Investment News

Gentile and Schneider were convicted of fraud and conspiracy after a seven week trial in federal court in Brooklyn.

SEC slams Wells Fargo, Merrill with $60 million in penalties over clients’ cash

Fri, 17 Jan 2025 03:24:53 GMT

The ongoing effort by the Securities and Exchange Commission to get the financial advice industry to focus on the interest big firms pay to clients for their cash took another turn today when the SEC penalized two broker-dealers of Wells Fargo Advisors $35 million and Merrill Lynch $25 million for not paying clients appropriate interest in advisory accounts.

According to the SEC , the difference between the interest paid to customers by the two wirehouses on cash and the yield in other cash sweep programs was almost 4 percent, or 400 basis points.

“These penalties are certainly significant enough to draw the big firms’ attention and get the issue straightened out,” said Sander Ressler, managing director of Essential Edge Compliance Outsourcing Services.

Financial advisors working at registered investment advisors have a fiduciary obligation to work in the best interest of clients when it comes to investment safety and returns. That includes not using only one investment option for any part of their portfolio, including cash.

Investment News

“These penalties are certainly significant enough to draw the big firms’ attention," one executive said.

SEC penalizes Brighton Securities over fee disclosures, conflicts

Tue, 24 Sep 2024 03:28:31 GMT

The Securities and Exchange Commission on Monday said it had penalized a Rochester, N.Y., hybrid broker-dealer, Rochester Securities Corp., for failing to disclose $1 million in fees that came from a new contract with a clearing firm, resulting in an undisclosed potential conflict.

The SEC’s penalty against Rochester Securities was $175,000, while the registered investment advisor arm of the firm was Brighton Securities Capital Management Inc., which managed $195 million in client assets before its recent closure.

A call Tuesday morning to a spokesperson at Brighton Securities seeking comment about the penalty and settlement was not returned. According to the SEC’s order, Brighton Securities agreed to the settlement without admitting or denying its findings.

“Broker-dealers and RIAs are right now in a position where they must over disclose if they are getting any outside, third party revenue,” said Sander Ressler, managing director of Essential Edge Compliance Outsourcing Services. “That’s any revenue not coming directly from financial advisors or commissions.

Investment News

“Broker-dealers and RIAs are right now in a position where they must over disclose," says one industry executive.

Convicted GPB executives want a get out of jail card

Tue, 17 Sep 2024 03:36:03 GMT

Fighting to stay out of prison, the two GPB Capital Holdings executives who were found guilty of fraud in August are arguing that their criminal convictions should be tossed out.

David Gentile, founder and CEO of GPB Capital, and Jeffry Schneider, broker-dealer chief, were found guilty on all fraud counts they faced on August 1 by a 12-person jury after a seven-week trial in federal court in downtown Brooklyn.

At the end of last week, both filed motions for acquittal with U.S. District Court Judge Rachel Kovner, the trial judge in the case. Gentile also filed a motion to dismiss and a motion for a new trial.

In 2021, the Justice Department, along with the Securities and Exchange Commission, charged Gentile, Schneider and another senior executive, Jeffrey Lash with a number of fraud charges, including creating a Ponzi-like scheme and securities fraud, wire fraud and conspiracy.

Investment News

“It's a bit ironic individuals can use the money taken from investors to pay for lawyers to keep them out of jail," says one executive.

Fake South Florida advisors target Venezuelan-Americans in scheme, SEC alleges

Thu, 05 Sep 2024 03:39:39 GMT

The Securities and Exchange Commission on Tuesday filed a complaint against two South Florida men posing as financial advisors who targeted members of the Venezuelan-American community in a multi-million dollar investment scheme.

Francisco Javier Malave Hernandez and Ricardo Javier Guerra Farias used a fake firm, Toller Stern Financial Services, as part of their scheme to defraud investors who bought close to $5 million in promissory notes. Most of the investors are members of the Venezuelan-American community, according to the SEC.

In a case of affinity fraud, the fraudsters who carry out scams frequently are, or pretend to be, members of the group they are trying to defraud, according to the SEC. Affinity fraud means the group could be a religious group, such as a particular denomination or church, or an ethnic group or immigrant community. It could be a racial minority or a particular workforce, including members of the military.

“An affinity group is any group that you belong to, be it professional, religious or social,” said Sander Ressler, managing director of Essential Edge Compliance Outsourcing Services. “Investors must always be aware and cautious of any individuals who are prospecting them through such a group.”

Investment News

Be dubious about investment professionals who are marketing investments through an affinity group, one industry executive says.

Posing as a broker, Maryland insurance agent grabs clients' savings

Thu, 29 Aug 2024 03:43:16 GMT

A former insurance agent who posed as a securities broker - without the appropriate licenses - has become the target of the Maryland Securities Commissioner after he took $100,000 from elderly customers and never returned it to them.

The insurance agent at the heart of the matter, Johnathan Munoz with the firm JM Financial Services, was never registered to sell securities but in late 2020 promised two customers in their seventies he would turn $100,000 earmarked for a separate brokerage account into $325,000 in little over a year, according to a July cease and desist order from the Maryland Securities Commissioner.

According to the Maryland order, Munoz allegedly defrauded the customers when he falsely represented to them that he was a stockbroker or financial advisor and offered to manage their investment assets through JM Financial. He also falsely told them he would open a separate securities account for them and manage their money when, in fact, he used their investment funds for his personal benefit, according to the Maryland Securities Commissioner.

Munoz was barred from ever working in the securities industry in Maryland and ordered to pay $115,000 as a civil penalty.

Investment News

"Customers should use regulated industries to their advantage and hire career specialists in each area of their lives," said one industry executive.

FINRA bars two ex-Raymond James advisors who sold unapproved products

Tue, 25 Jun 2024 03:45:52 GMT

Two Raymond James Financial Services Inc. financial advisors on Monday were barred from the securities industry for not cooperating in investigations, according to the Financial Industry Regulatory Authority Inc.; both had previously been flagged by Raymond James for selling products to customers the firm had not signed off on as well as selling away , which involves offering clients investments that are not approved by the firm.

Bryan Noonan sold an “unapproved investment,” while Thomas Reyes sold annuities not sanctioned by the firm. Both failed to cooperate with Finra’s investigation, a flouting and violation of rules that leads to the self-regulator barring the financial advisor from working in the securities industry.

Raymond James Financial Services is the independent contractor broker-dealer arm of Raymond James Financial Inc., which has more than 8,700 financial advisors across its various work platforms.

"When it comes to products that have not been ok'd or outside business activities by advisors, firms can't be reactionary or do the work after the fact," said Sander Ressler, managing director of Essential Edge Compliance Outsourcing Services. "They must take reasonable steps to prevent and detect this kind of behavior under Finra's supervision rules, and use all tools available, including government databases, to do so."

Investment News

Firms must take reasonable steps to avoid financial advisors' selling away, one compliance expert noted.

SEC sued over broker-dealer texting fines data

Thu, 06 Jun 2024 03:49:07 GMT

A lawsuit filed today against the SEC seeks information about how the agency has calculated billions of dollars in fines against brokerdealers for off-channel communications record keeping failures. Since 2021, the Securities and Exchange Commission has been on an enforcement blitz with broker-dealers and RIAs over that issue. Many large firms, including JPMorgan, Bank of America, Barclay’s, Citigroup, Credit Suisse, Deutsche, Goldman Sachs, and Morgan Stanley have agreed to pay $125 million each to settle SEC charges, though smaller ones have had penalties of less than half that amount. In its lawsuit filed in US District Court in Florida, the American Securities Association is trying to force the SEC to provide documents showing how those amounts were reached. That group earlier this year filed three Freedom of Information Act requests with SEC that were subsequently denied.

“In the Fall of 2021, the SEC began to investigate certain brokerdealers’ retention of ‘off-channel’ communications, such as text messages on personal devices. The SEC demanded scores of documents from numerous companies without any suspicion that they violated the commission’s rules,” the lawsuit stated. “There appears to be no rhyme or reason for how the SEC imposed these penalties, and the SEC has provided little explanation into its decision making. The regulated community thus is left with many questions.”

Investment News

‘Extraordinarily large’ sums prompt American Securities Association’s lawsuit, which asks commission to turn over documents showing how those amounts were reached.

Colorado Securities Head Moves to Halt 'Imposter' Firms

Mon, 15 Apr 2024 03:55:23 GMT

Colorado Securities Commissioner Tung Chan issued separate orders against two “imposter” firms last week, the state department of regulatory agencies’ division of securities said.

Joyce Dunbar Management and Fluxia Capital Management both falsely claimed to have offices in the same building as the Colorado Department of Regulatory Agencies, which houses the division alleging “the companies are fraudulent and using false statements on their websites to cloak themselves in legitimacy to lure in victims who are seeking investment advisory services.”

wealthmanagement.com

The state securities agency is trying to shut down two entities falsely claiming to be wealth management firms operating out of the same building as the agency itself.

SEC wants LPL to pony up $50 million over messaging apps, texts

Fri, 23 Feb 2024 03:52:13 GMT

LPL Financial Holdings Inc. appears to be on the hook for a $50 million settlement and penalty from the Securities and Exchange Commission over compliance failures in keeping records of financial advisors’ and employees’ electronic communications, such as text messages and apps. One year ago, LPL reported that the SEC had made inquiries into whether the broker-dealer was meeting industry standards related to retaining with electronic communications on personal devices unapproved by the giant brokerage, but it did not detail the amount of a potential penalty. In LPL Financial Holdings’ annual report, issued Wednesday, the firm disclosed the details of the penalty. By Bruce Kelly | February 23, 2024 “In October 2022, the company received a request for information from the SEC in connection with an investigation of the company’s compliance with records preservation requirements for business-related electronic communications stored on personal devices or messaging platforms that have not been approved by the company,” according to the annual report.

SEC staff proposed a potential settlement to resolve the matter, including a $50 million civil monetary penalty, according to the annual report. LPL recorded a $40 million expense in 2023 as a result, which is the amount that is not covered by its captive insurance subsidiary.

Investment News

‘The large size of such fines underscores the point that regulators want this behavior to change quickly,’ a compliance executive notes.

Cambridge, Lincoln among firms hit by SEC's $81M fine blitz

Fri, 09 Feb 2024 03:59:16 GMT

Leading independent broker-dealers Cambridge Investment Research Inc. Northwestern Mutual Investment Services and Lincoln Financial Advisors Corp. were among 16 wealth management firms that agreed to pay $81 million collectively to settle charges related to the Securities and Exchange Commission's ongoing investigation of how the financial advice industry at times mishandles electronic communications, including personal texting , among employees and financial advisors.

According to a statement Friday by the SEC, the firms admitted the facts set forth by the SEC orders, acknowledged that their conduct violated record-keeping provisions, and have started to implement improvements in their compliance.

Broker-dealers and registered investment advisors are highly regulated businesses when it comes to electronic communications like emails and text messages. The SEC has been heavily penalizing firms whose financial advisors or other employees go around or circumvent company-approved channels of sending messages. Regulators are particularly focused on firms' failure to monitor employees using unauthorized messaging apps.

"These text messaging issues at broker-dealers and RIAs could have been avoided with some regulatory guidance several years ago," said Sander Ressler, managing director of Essential Edge Compliance Outsourcing Services. "Texting isn't a recent occurrence. Firms, financial advisors and employees have been using text messages, especially with foreign or overseas clients, and it was a form of communication that wasn't captured.

Investment News

Text messaging issues at broker-dealers and RIAs could have been avoided with some regulatory guidance, compliance expert says.

REG BI ENFORCEMENT POISED TO TAKE NEXT STEP

Mon, 15 Jan 2024 04:04:17 GMT

Ever since Regulation Best Interest went into force, financial advisors have been waiting to see how it would change the oversight of in-vestment advice. They may get more insight this year. The Securities and Exchange Commission im-plemented the broker-dealer standard of conduct in June 2020 during the Covid pandemic. The agency essentially gave financial firms a year’s grace peri-od in which it expected a “good-faith” effort to come into compliance with the rule, which prohibits bro-kers from putting their revenue interests ahead of their clients’ interests in investment returns. Starting in mid-2021, the SEC brought enforce-ment cases against firms that failed to file – or were delayed in filing – their Form CRS, a disclosure document that was part of the Reg BI rule-making package. In mid-2022, the SEC took its first substan-case that could only have been brought under Reg BI, said Sander Ressler, owner and managing di-rector of Essential Edge Compliance Outsourcing Services. “Regulators are looking at [Reg BI] very closely,” Ressler said. “This is going to be something that is going to be front and center in terms of regulatory actions in 2024.” REG BI CARE OBLIGATION Ressler anticipates an enforcement case that is based on Reg BI’s care obligation, which requires that a broker understand the potential risks, re-wards, and costs of a recommendation and whether it is in the customer’s best interests based on those factors. The broker also must consider reasonably available alternatives. Whether brokers look at the investment land-“Regulators are going to take a much heavier hand when it comes to reviewing apples-to-apples product comparisons” SANDER RESSLER, ESSENTIAL EDGE COMPLIANCE OUTSOURCING SERVICES

Investment News

Brokers have been wondering whether they’re complying correctly with the standard of conduct. Enforcement cases this year may shed more light than ever before

'Pig-Butchering' Scams a Top Investor Threat, According to State Regulators

Thu, 20 Apr 2023 04:08:42 GMT

A particular kind of scam is hogging the attention of state securities regulators.

So-called pig-butchering schemes are becoming increasingly prominent in the cryptocurrency space, and 46% of state regulators in the U.S. and Canada say these type of scams are a top concern, according to the North American Securities Administrators Association's annual list of top investor threats.

Pig-butchering schemes were the second-most-cited threat by U.S. and Canadian state securities regulators responding to NASAA’s survey, marking the first time the threat has made the list. Digital asset frauds took the top spot, cited by 62% of respondents, while social media and internet schemes followed behind, at 41%.

wealthmanagement.com

The oddly named scheme, where a fraudster will bleed the victim’s finances in small increments, akin to fattening up a pig before they’re slaughtered, is gaining ground in the crypto space.

Commonwealth Found Liable for Rev-Share Disclosure Failures

Tue, 11 Apr 2023 04:12:16 GMT

Commonwealth Financial Network is liable for failing to disclose that its investment advisor representatives were incentivized to sell certain products because of a revenue sharing arrangement that the firm had with a clearing broker, a Massachusetts district court judge wrote on Friday.

The broker-dealer kept under wraps a revenue-sharing arrangement with Fidelity affiliate National Financial Services through which Commonwealth collected fees from certain mutual funds that advisors sold to clients, according to an August 2019 suit filed by the Securities and Exchange Commission in Massachusetts district court. The firm failed to disclose the revenue-sharing agreement from 2014 and 2018.

Judge Indira Talwani granted the SEC's request for early judgment in the case, holding Commonwealth responsible for the disclosure issues, and rejecting the firm's argument that the SEC did not provide fair notice of the disclosure obligations in the lawsuit.

The judge's order does not state whether Commonwealth will have to pay a fine or face another penalty.

Commonwealth had argued that the SEC did not prove its fee arrangement with NFS created conflicts of interest. The Waltham, Massachusetts-based broker-dealer also claimed that the regulator changed its disclosure standards without giving the firm

IGNITES

A judge ruled that the broker-dealer violated the Advisers Act by failing to properly disclose that its representatives were incentivized to steer clients into certain mutual funds.

Brokerages need to update tech systems to show Reg BI work to SEC

Wed, 01 Feb 2023 04:14:48 GMT

Brokerages need to upgrade their technology to better show their work on meeting Regulation Best Interest obligations, but it remains unclear when the SEC will put teeth into the rule, compliance experts and investor advocates say.

Earlier this week, the Securities and Exchange Commission released a risk alert that outlined compliance failures related to Reg BI the agency has seen in recent examinations. One theme in the document was that brokerages lacked systems for ensuring their registered representatives met Reg BI requirements when making recommendations on rollovers, account selection and investment strategies.

The SEC also found a lack of systems to help reps consider costs and reasonably available alternatives and monitor whether they’re doing so.

Brokerages should consider bolstering their technology, said Parham Nasseri, vice president of product and regulatory strategy at InvestorCom, a compliance consulting firm. It’s difficult to prove Reg BI compliance with manual documentation and self-attestation., especially for a firm with many reps.

Investment News

An SEC risk alert this week warned firms that surveillance systems fell short in ensuring reps consider costs and reasonably available alternatives. Will enforcement be next?

Advisor Group B/Ds Dodge Fines in Settling FINRA Charges

Thu, 26 Jan 2023 04:17:00 GMT

Securities America, Royal Alliance and SagePoint will collectively pay hundreds of thousands in restitution to settle disciplinary charges with the Financial Industry Regulatory Authority (FINRA); but the regulator declined to fine the firms, citing their “extraordinary cooperation.”

Securities America, Royal Alliance and SagePoint are all subsidiaries of Advisor Group, a large network of independent broker/dealers. In the charges, FINRA detailed how the firms allegedly didn’t have supervising systems in place to make sure eligible customers got applicable sales charge waivers and share class deals when rolling over 529 plans between state plans.

wealthmanagement.com

The regulator cited the 'extraordinary cooperation' of Securities America, Royal Alliance and SagePoint as the reason for no penalties beyond restitution.

Downstream WhatsApp Regulatory Woes for Wealth Managers

Sat, 13 Aug 2022 04:20:32 GMT

Why? Many instant messaging apps – including the leading platform in this segment, WhatsApp – aren’t being supervised appropriately, and the content isn’t being captured and archived as regulators expect and demand.

And the regulators are coming down hard on offending parties. In July, Morgan Stanley reported that it will likely need to pay as much as $200 million in fines for not monitoring employee use of unauthorized instant messaging apps.

Wealth Solutions Report

Instant messaging apps continue to rise in use across the world, and that’s causing agita for compliance professionals at major global financial institutions, and the regulators who oversee them – At least in the U.S.

Supreme Court’s EPA Ruling Could Kill Fiduciary Rule 2.0 Efforts

Sat, 16 Jul 2022 04:22:52 GMT

Wealth management compliance and supervisory professionals worth their salt will constantly observe the political landscape to determine the potential for new rules and regulations.

And if there’s any development worth watching more closely, it’s the Supreme Court’s ruling at the end of last month that significantly restricts the ability of the Environmental Protection Agency (EPA) to regulate carbon emissions.

The Supreme Court’s recent ruling underscores that its conservative majority is willing to adopt a more activist stance on a wide range of issues.

EPA today – SEC tomorrow?

And perhaps even more importantly, the ruling sends a clear message that SCOTUS believes in carefully limiting the powers of regulators.

Wealth Solutions Report

SCOTUS Conservative Majority’s Ruling on EPA Has Significant Implications for Wealth Management Regulatory Landscape

Report Finds 'No Evidence' of Secret Agreement Between Wells Fargo, FINRA

Wed, 29 Jun 2022 21:26:24 GMT

A law firm hired by the Financial Industry Regulatory Authority found “no evidence” of a secret agreement between an attorney for Wells Fargo and the self-regulatory organization to exclude certain arbitrators from a particular proceeding after a Georgia court overturned an arbitration award on that basis, according to a report released by FINRA.

In February, a Georgia Superior Court overturned an arbitration award previously decided in favor of Wells Fargo, arguing that counsel for Wells Fargo “manipulated the FINRA arbitrator selection process” and violated FINRA’s code for arbitration proceedings. Fulton County Superior Court Judge Belinda Edwards penned the decision vacating the award levied against petitioners Brian Leggett and Bryson Holdings for more than $80,000, saying they were denied the right to a computer-generated neutral list of arbitrators and that Wells Fargo counsel was able to have particular arbitrators removed as options for selection.

wealthmanagement.com

FINRA released a report from independent counsel Lowenstein Sandler, concluding there was no agreement between Wells Fargo’s counsel and the regulator to exclude certain arbitrators.

PIABA Pushes FINRA to Resume In-Person Arbitration Hearings

Tue, 27 Apr 2021 04:28:14 GMT

The Financial Industry Regulatory Authority’s postponement of in-person arbitration proceedings is benefiting firms while delaying investors’ attempts to recover what they may have lost, according to a new letter to FINRA from the Public Investors Advocate Bar Association (PIABA).

PIABA President David Meyer argues in the letter that many courts and several private arbitration forums throughout the country have already restarted face-to-face trials and meetings. The organization conducted an analysis showing that every court in the country’s 20 largest FINRA hearing locations are already conducting in-person trials or are scheduled to do so by July.

wealthmanagement.com

While many courts and private arbitration forums have already opened, FINRA continues to postpone in-person arbitration, keeping investors from recovering their losses, PIABA argues in a recent letter.

arbitration-iq

Compliance and Regulatory Authority Sander Ressler Launches Arbitration IQ

Judge OKs release of $400 million to besieged GPB investors - InvestmentNews

﻿

Meanwhile, GPB senior executives' sentencing for fraud pushed to May.

Convicted of fraud, GPB executives object to plans to return money to investors - InvestmentNews

Gentile and Schneider were convicted of fraud and conspiracy after a seven week trial in federal court in Brooklyn.

SEC slams Wells Fargo, Merrill with $60 million in penalties over clients’ cash

“These penalties are certainly significant enough to draw the big firms’ attention," one executive said.

SEC penalizes Brighton Securities over fee disclosures, conflicts

“Broker-dealers and RIAs are right now in a position where they must over disclose," says one industry executive.

Convicted GPB executives want a get out of jail card

“It's a bit ironic individuals can use the money taken from investors to pay for lawyers to keep them out of jail," says one executive. ﻿

Fake South Florida advisors target Venezuelan-Americans in scheme, SEC alleges

Be dubious about investment professionals who are marketing investments through an affinity group, one industry executive says.

Posing as a broker, Maryland insurance agent grabs clients' savings

"Customers should use regulated industries to their advantage and hire career specialists in each area of their lives," said one industry executive.

FINRA bars two ex-Raymond James advisors who sold unapproved products

Firms must take reasonable steps to avoid financial advisors' selling away, one compliance expert noted.

SEC sued over broker-dealer texting fines data

‘Extraordinarily large’ sums prompt American Securities Association’s lawsuit, which asks commission to turn over documents showing how those amounts were reached.

Colorado Securities Head Moves to Halt 'Imposter' Firms

The state securities agency is trying to shut down two entities falsely claiming to be wealth management firms operating out of the same building as the agency itself.

SEC wants LPL to pony up $50 million over messaging apps, texts

‘The large size of such fines underscores the point that regulators want this behavior to change quickly,’ a compliance executive notes.

Cambridge, Lincoln among firms hit by SEC's $81M fine blitz

Text messaging issues at broker-dealers and RIAs could have been avoided with some regulatory guidance, compliance expert says.

REG BI ENFORCEMENT POISED TO TAKE NEXT STEP

Brokers have been wondering whether they’re complying correctly with the standard of conduct. Enforcement cases this year may shed more light than ever before

'Pig-Butchering' Scams a Top Investor Threat, According to State Regulators

The oddly named scheme, where a fraudster will bleed the victim’s finances in small increments, akin to fattening up a pig before they’re slaughtered, is gaining ground in the crypto space.

Commonwealth Found Liable for Rev-Share Disclosure Failures

A judge ruled that the broker-dealer violated the Advisers Act by failing to properly disclose that its representatives were incentivized to steer clients into certain mutual funds.

Brokerages need to update tech systems to show Reg BI work to SEC

An SEC risk alert this week warned firms that surveillance systems fell short in ensuring reps consider costs and reasonably available alternatives. Will enforcement be next?

Advisor Group B/Ds Dodge Fines in Settling FINRA Charges

The regulator cited the 'extraordinary cooperation' of Securities America, Royal Alliance and SagePoint as the reason for no penalties beyond restitution.

Downstream WhatsApp Regulatory Woes for Wealth Managers

Instant messaging apps continue to rise in use across the world, and that’s causing agita for compliance professionals at major global financial institutions, and the regulators who oversee them – At least in the U.S.

Supreme Court’s EPA Ruling Could Kill Fiduciary Rule 2.0 Efforts

SCOTUS Conservative Majority’s Ruling on EPA Has Significant Implications for Wealth Management Regulatory Landscape

Report Finds 'No Evidence' of Secret Agreement Between Wells Fargo, FINRA

FINRA released a report from independent counsel Lowenstein Sandler, concluding there was no agreement between Wells Fargo’s counsel and the regulator to exclude certain arbitrators.

PIABA Pushes FINRA to Resume In-Person Arbitration Hearings

While many courts and private arbitration forums have already opened, FINRA continues to postpone in-person arbitration, keeping investors from recovering their losses, PIABA argues in a recent letter.

“It's a bit ironic individuals can use the money taken from investors to pay for lawyers to keep them out of jail," says one executive.