The SEC has repeatedly stated, in the OCC context as well as other contexts, that significant credit-for-cooperation will be given in circumstances that warrant it. (See also .) These cases underscore that such credit may be available and awarded, but only if firms act promptly by investigating potential misconduct, self-report the issues to the SEC, and then provide substantial and continuing cooperation in the SEC's investigation.

Mutual fund share class and fee waiver issues have been plaguing broker-dealers for literally a quarter of a century. In this matter, the alphabet soup exercise of class A v. C v. R shares continues. As FINRA's well-worn mutual fund template has stated, Class A shares typically impose a front-end sales charge and annual fund expenses, including ongoing distribution and service fees, that are usually lower than other share classes. Class C shares, by contrast, typically do not impose a front-…

According to the FINRA AWC, the firm's platform catered to retail investors who were "speculative and high risk only," and the firm provided self-directed trading to them through a web-based trading platform. FINRA found the firm's AML Program lacking in several respects: (1) the firm failed to reasonably review exception alerts for suspicious activity that were generated by its own and its clearing firms' automated AML surveillance systems, (2) despite catering to "speculative and high risk…

The SEC continues to bring Regulation Best Interest ("Reg BI") cases for failing to meet the compliance date obligations of that Rule. In this matter, the SEC imposed a $325,000 financial penalty on the broker-dealer for failing to comply with Reg BI. This level of financial penalty seems punitive relative to the alleged misconduct contained in the SEC Order and the size of the firm.

In this case, the broker-dealer recommended and sold structured notes to customers. Also, during the…