In the AWC, FINRA states that "[t]he falsifications and forgeries were not in furtherance of unauthorized activity, there was no customer harm, and no customer complained." In other words, it appears that the signature forgeries or falsifications were likely done for convenience rather than for nefarious reasons. Nonetheless, and even though the firm had no prior history of similar violations, the firm agreed to pay a $325,000 fine to resolve this matter. While this seems like a large fine…
The AWC serves as a reminder that shelf offerings are subject to FINRA's Corporate Financing Rule, FINRA Rule . This rule imposes several obligations on FINRA members that participate in covered public securities offerings. These obligations include the making of timely filings with FINRA and the disclosure in the prospectus or similar document of each item of underwriting compensation received by the member. FINRA members that engage in public offerings are required to comply fully with…
This matter serves as a reminder of the importance of a firm's WSPs providing specificity with respect to indications of potentially excessive trading. It is not enough to require review of "active" customer accounts without describing the specific activity that might trigger the need for further review. The AWC also underscores the importance, in the suitability context, of reviewing not only daily trades, but taking a longer view to identify patterns of unsuitable trades over time. Finally…
It would be interesting to know the typical amount of time taken by the validation checks, which checks were presumably required under ("Risk management controls for brokers or dealers with market access"). It would also be interesting to know whether that process was susceptible to delays. Absent delays, and assuming the validation process was not unreasonable in its duration, it could be argued that the time taken to validate the orders is just part of the regulatory cost of doing…
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In the AWC, FINRA states that "[t]he falsifications and forgeries were not in furtherance of unauthorized activity, there was no customer harm, and no customer complained." In other words, it appears that the signature forgeries or falsifications were likely done for convenience rather than for nefarious reasons. Nonetheless, and even though the firm had no prior history of similar violations, the firm agreed to pay a $325,000 fine to resolve this matter. While this seems like a large fine…
The AWC serves as a reminder that shelf offerings are subject to FINRA's Corporate Financing Rule, FINRA Rule . This rule imposes several obligations on FINRA members that participate in covered public securities offerings. These obligations include the making of timely filings with FINRA and the disclosure in the prospectus or similar document of each item of underwriting compensation received by the member. FINRA members that engage in public offerings are required to comply fully with…
This matter serves as a reminder of the importance of a firm's WSPs providing specificity with respect to indications of potentially excessive trading. It is not enough to require review of "active" customer accounts without describing the specific activity that might trigger the need for further review. The AWC also underscores the importance, in the suitability context, of reviewing not only daily trades, but taking a longer view to identify patterns of unsuitable trades over time. Finally…
It would be interesting to know the typical amount of time taken by the validation checks, which checks were presumably required under ("Risk management controls for brokers or dealers with market access"). It would also be interesting to know whether that process was susceptible to delays. Absent delays, and assuming the validation process was not unreasonable in its duration, it could be argued that the time taken to validate the orders is just part of the regulatory cost of doing…