July 27, 2015
FINRA Comments on DOL Proposed Conflict of Interest Rule and Related Proposals
On July 17, 2015, FINRA submitted comments on the DOL’s April 14, 2015 proposals, which included amendments to the definition of “fiduciary,” a proposed best interest contract exemption, and a proposed exemption for principal transactions in certain debt securities. FINRA’s comments support the implementation of a best interest standard for…
July 20, 2015
FINRA Requests Comment on a Revised Proposal to Adopt a Consolidated FINRA Rule Regarding Discretionary Accounts and Transactions
On June 17, 2015, FINRA issued a request for comment on a revised proposal to adopt a new FINRA Rule 3260 for Discretionary Accounts and Transactions by Persons other Than the Customer. The accompanying Regulatory Notice 15-22 proposes to revise and consolidate NASD Rule 2510 and Incorporated NYSE Rule 408…
July 20, 2015
FINRA Issues Notice of Cyber Attacks on Member Firms
On June 19, 2015 FINRA issued an Information Notice on recent Distributed Denial of Service (“DDoS”) attacks by DD4BC, a cyber-criminal group. According to FINRA, DD4BC appears to be targeting financial services and broker-dealer firms that have an online presence. A DDoS attack will overwhelm a website or network with…
July 20, 2015
SEC Charges Unregistered Brokers in EB-5 Immigrant Investor Program
On June 23, 2015, the SEC announced charges against Ireeco LLC and its successor, Ireeco Limited, for acting as unregistered brokers for more than 150 investors in the EB-5 Visa Program, in violation of Section 15(a) of the Exchange Act. The EB-5 Visa Program creates a way for foreign applicants…
July 20, 2015
FINRA Fines Morgan Stanley and Scottrade with Failure to Supervise Transfer of Funds to Third-Party Accounts
On June 19, 2015, FINRA fined Morgan Stanley Smith Barney, LLC (“MSSB”) and Scottrade, Inc. (“Scottrade”) for failing to implement reasonable supervisory systems to monitor the transmittal of customer funds to third-party accounts. Pursuant to NASD Conduct Rules 3012 and 3010, member firms must maintain supervisory control policies sufficient to…
July 7, 2015
SIFMA Proposes “Best Interests of the Customer” Standard for Broker-Dealers
On June 3, 2015, SIFMA proposed a “best interestsof the customer” standard that would apply to broker-dealers and therecommendations issued to any of their individual retail customers about anybrokerage accounts. SIFMA’s proposal wasin response to an April 14, 2015 definition proposal by the Department of Labor(“DOL”) about who is considered a fiduciary under ERISA, and the DOL’s carve-outfrom their proposed definition for broker-dealers who service IRA accounts. SIFMA’sstandard articulates its support for a move toward a uniform “Best Interests ofthe Customer” standard for broker-dealers.
July 6, 2015
FINRA Proposes Changes to Rules Governing Communications with the Public
On April 16, 2015 FINRA announced proposed amendments and revisions to FINRA rules governing communications with the public. The proposed changes are part of a retrospective rule review launched by FINRA in April 2014 and are aimed at better aligning the investor protection benefits and economic impacts of these rules. The proposed amendments revise the filing requirements in FINRA Rules 2210 and 2214 and the content and disclosure requirements in FINRA Rule 2213.