Rule Making By Enforcement: Churning

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Brad Bennett, FINRA’s Executive Vice President and Chief of Enforcement, said, “A key element of retail investor protection is the aggressive pursuit of brokers who churn and excessively trade customer accounts.  FINRA has no tolerance for brokers who place commissions ahead of what is suitable and appropriate for their customers.” (FINRA News Release August 6, 2015.)

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The SEC Halts Securities Fraud Scheme

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Earlier this week, the SEC won a court-ordered asset freeze of two former brokers, James Brennan III and Douglas Dyer, and their company Broad Street Ventures. The former brokers, both of whom have disciplinary histories with FINRA and state regulators, allegedly raised more than $5 million from investors by selling purported shares in eight similarly named companies. Continue reading

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Updated Investor Alert for Seniors: Five Red Flags of Investment Fraud

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Although many believe in upholding the old adage to respect one’s elders, there are others who seek to take advantage of older Americans, targeting them for investment fraud.  Unfortunately, many senior citizens fall victim to these scams if not fully informed.

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Selecting an Expert Witness

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Occasionally, in the event a case requires litigation, legal counsel may request the assistance of one or more expert witnesses.  As specialists in their field, these experts can provide advanced knowledge, skill, experience, training and/or education that can assist with the case, including determining whether or not going to trial is necessary.

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Citigroup Fined by SEC for Providing Incomplete ‘Blue Sheet’ Data

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On July 12, 2016, after undergoing an investigation by the Securities and Exchange Commission (SEC) regarding a computer coding error that caused Citigroup Global Markets to provide the agency with incomplete “blue sheet” information about trades it executed from May 1999 to April 2014, the Manhattan-based investment banking and financial services firm agreed to admit wrongdoing and pay a $7 million penalty, the largest penalty to date for blue sheet violations.

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ENFORCEMENT DEFENSE

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When you receive an “8210 letter” from FINRA, your whole world can change.  FINRA does not have subpoena power; rather, their investigative power comes from FINRA Rule 8210.  But, that rule is very powerful when it comes to member firm broker-dealers.  Often, an 8210 letter can be the first step in a long drawn out investigation that will take time and money to respond to and possibly fight.

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FINRA Annual Conference – Part 2

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Having a firm culture that puts client interests first is the basis of the fiduciary duty. Any BD that believes that all they have is a suitability requirement is living in La La land. Almost all arbitration claims against brokers has a claim for breach of fiduciary duty. And now, the Department of Labor (“DOL”) in its new fiduciary duty rule has included broker dealers who deal in any sort of retirement investments as fiduciaries. Yes there are exemptions and exceptions, but this is opening the door to a full blown regulatory fiduciary duty. FINRA has been sneaking fiduciary duty into most of their new regulations by stating that firms must be “client-centric” instead of “Product-centric”; best interest of the client, not the BD or the Rep. Continue reading

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