This enforcement case illustrates two important concerns in broker-dealer compliance. First, having a "great" compliance manual that, for example, specifies "numerous account risk factors and red flags" is worse than useless if a firm does not execute on them. It simply makes no sense to specify very detailed procedures, and then not execute upon them. Second, anything to do with penny stocks is the third rail of AML/securities law compliance. Any firm that wants to be in the business of…

CFTC Commissioners often express concern that the Federal Reserve Board ("FRB") overstates the risk of financial market products. Given the FRB's indirect control over the capital of many CFTC- and SEC-regulated entities through the FRB's dominion over bank holding companies, this raises a question as to whether the FRB is simply less comfortable with CFTC-regulated products and with securities than it is with traditional banking products, such as mortgages, and thus overstates the risk of…

See also our memorandum on Regulation Best Interest, .

Ms. Dixon's statement is worth reading and offers a deep and, in many ways, nuanced understanding of the privacy issues and consequences of the selling of data driven products to the financial industry. She acknowledges that problems with the accuracy of the data may result in "diminished opportunities," even as there are good vendors using good data and, in fact, using it in a rational manner.

On one hand, Congress is well on its way to limiting consumer data usage (with good reason…