In August 2017, FINRA entered into a consent agreement with a Georgia-based broker-dealer arising from improper practices and procedures relating to its sales of leveraged ETFs.1  The sales included ETFs that were leveraged, inverse, or both inverse and leveraged, and that were sold to retail accounts.  The action reflects FINRA’s continuing concerns about the

On July 12, 2017, FINRA issued guidance on its recent amendments to Rule 2232. The new requirements, which are scheduled to take effect on May 14, 2018, apply to transactions with retail (and not institutional, as defined in Rule 4512(c)) customers in corporate and agency debt securities. Beginning on the effective date, FINRA will require

On April 21, 2017, FINRA issued a press release marking the second anniversary of its Securities Helpline for Seniors.  The press release may be found here.

As most of our readers know, the Helpline provides a toll-free number that senior individuals and their caretakers can call to voice concerns about the handling of their

In April 2017, FINRA announced that it had revised its sanction guidelines for violations of its rules. The new revisions, among other things:

  • contain a new factor requiring that the exercise of undue influence over a customer, such as an elderly investor, be considered when adjudicating violations;
  • introduce three new sanction guidelines: “Systemic Supervisory Failures,”

On March 30, 2017, the SEC approved the adoption of new FINRA Rule 2165 (Financial Exploitation of Specified Adults) (see our related blog post about the proposal).  Among other things, Rule 2165 permits brokers to place holds on disbursements of funds or securities from the accounts of “specified adult” customers.  Specified adults include those 65

In our capacity as advisers to financial institutions, we carefully monitor FINRA’s rulemaking and enforcement activities with a view to thinking about how these affect market participants and their activities.  FINRA’s March 2017 announcement of its engagement initiative provides an opportunity for the industry to consider FINRA’s activities on a much broader level.

FINRA’s special

Introduction

Consistent with prior practice, with the arrival of the new year, FINRA has published its key examination priorities.  The letter may be found at the following link: http://www.finra.org/sites/default/files/2017-regulatory-and-examination-priorities-letter.pdf.

As in prior years, the letter covers a broad array of topics.  This year’s topics include:

  • Hiring and monitoring the activities of “high-risk and recidivist