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Article
Publication date: 14 September 2010

Henry A. Davis

326

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Journal of Investment Compliance, vol. 11 no. 3
Type: Research Article
ISSN: 1528-5812

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Reference Reviews, vol. 24 no. 7
Type: Research Article
ISSN: 0950-4125

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Article
Publication date: 6 July 2015

Henry A Davis

96

Abstract

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Journal of Investment Compliance, vol. 16 no. 2
Type: Research Article
ISSN: 1528-5812

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Article
Publication date: 7 September 2015

Henry A Davis

104

Abstract

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Journal of Investment Compliance, vol. 16 no. 3
Type: Research Article
ISSN: 1528-5812

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Article
Publication date: 2 November 2015

Henry A Davis

224

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Journal of Investment Compliance, vol. 16 no. 4
Type: Research Article
ISSN: 1528-5812

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Article
Publication date: 5 May 2015

Henry A Davis

130

Abstract

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Journal of Investment Compliance, vol. 16 no. 1
Type: Research Article
ISSN: 1528-5812

Article
Publication date: 8 June 2012

Henry A. Davis

The purpose of this paper is to provide of selected Financial Industry Regulatory Authority (FINRA) regulatory notices and disciplinary actions issued in January…

Abstract

Purpose

The purpose of this paper is to provide of selected Financial Industry Regulatory Authority (FINRA) regulatory notices and disciplinary actions issued in January, February, and March 2012.

Design/methodology/approach

The paper provides Regulatory Notice 12‐03, January 2012, Complex Products: Heightened Supervision of Complex Products; Regulatory Notice 12‐05, January 2012, Customer Account Protection: Verification of Emailed Instructions to Transmit or Withdraw Assets from Customer Accounts; Regulatory Notice 12‐13, March 2012, Best Execution, SEC Approves Consolidated FINRA Best Execution Rule. It summarizes ten disciplinary actions for recommending unsuitable sales of unit investment trusts (UITs) and floating rate loan funds; using misleading marketing materials in the sale of a non‐traded real estate investment trust (REIT); selling interests in private placement offerings without having a reasonable basis for recommending the securities; unsuitable sales of reverse convertible securities; violating Regulation SHO (Reg SHO) and failing to properly supervise short sales of securities and marking of sale orders; misrepresenting delinquency data and inadequate supervision in connection with the issuance of residential subprime mortgage securitizations (RMBS); permitting a registered representative to publish advertisements that failed to provide a sound basis for a reader to evaluate the products and services being offered, contained exaggerated, unwarranted and misleading statements, and failed to disclose the firm's name; failing to conduct reasonable due diligence regarding securities an entity issued; failing to disclose certain conflicts of interest in research reports and research analysts' public appearances; and failing to develop and enforce written procedures reasonably designed to achieve compliance with NASD Rule 3010(d)(2) regarding the review of electronic correspondence.

Findings

The paper reveals for Regulatory Notice 12‐03 that the decision to recommend complex products to retail investors is one that a firm should make only after the firm has implemented heightened supervisory and compliance procedures; firms also should monitor the sale of these products in a manner that is reasonably designed to ensure that each product is recommended only to a customer who understands the essential features of the product and for whom the product is suitable. For Notice 12‐05 it finds that, given the rise in incidents reported to FINRA involving fraud perpetrated through compromised customer e‐mail accounts, FINRA recommends that firms reassess their specific policies and procedures for accepting and verifying instructions to withdraw or transfer customer funds that are transmitted via email or other electronic means, as well as firms' overall policies and procedures in this area. For Notice 12‐13: FINRA Rule 5310 leaves in place the general requirements of best execution, which are for a member firm, in any transaction for or with a customer or a customer of another broker‐dealer, to use “reasonable diligence” to ascertain the best market for a security and to buy or sell in such market so that the resultant price to the customer is as favorable as possible under prevailing market conditions.

Originality/value

These are direct excerpts designed to provide a useful digest for the reader and an indication of regulatory trends.

Article
Publication date: 7 September 2012

Henry A. Davis

The aim is to provide details of selected Financial Industry Regulatory Authority (FINRA) Regulatory Notices and Disciplinary Actions issued in March, April and May 2012.

Abstract

Purpose

The aim is to provide details of selected Financial Industry Regulatory Authority (FINRA) Regulatory Notices and Disciplinary Actions issued in March, April and May 2012.

Design/methodology/approach

The paper provides Regulatory Notice 12‐17, April 2012, “Telemarketing: SEC Approves Consolidated Telemarketing Rule,” and Regulatory Notice 12‐25, May 2012, “Suitability: Additional Guidance on FINRA's New Suitability Rule”.

Findings

Notice 12‐17: FINRA Rule 3230 (Telemarketing) updates exiting NASD and NYSE rules that require member firms to maintain and consult do‐not‐call lists, limit the hours of telephone solicitations and prohibit members from using deceptive and abusive acts and practices in connection with telemarketing, and adopts provisions that are substantially similar to Federal Trade Commission (FTC) rules that prohibit deceptive and other abusive telemarketing acts or practices. Notice 12‐25: The new FINRA Rule 2111 requires, in part, that a broker‐dealer or associated person “have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the [firm] or associated person to ascertain the customer's investment profile.” In general, the new rule retains the core features of the previous NASD suitability rule, codifies several important interpretations of the predecessor rule and imposes a few new or modified obligations.

Originality/value

These are direct excerpts designed to provide a useful digest for the reader and an indication of regulatory trends.

Details

Journal of Investment Compliance, vol. 13 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

Article
Publication date: 6 April 2012

Henry A. Davis

The purpose of this paper is to provide summaries of selected Financial Industry Regulatory Authority (FINRA) regulatory notices and disciplinary actions issued in…

Abstract

Purpose

The purpose of this paper is to provide summaries of selected Financial Industry Regulatory Authority (FINRA) regulatory notices and disciplinary actions issued in October, November, and December 2011.

Design/methodology/approach

The paper provides Regulatory Notice 11‐49, October 2011, Advertising Regulation; Regulatory Notice 11‐52, November 2011, Senior Designations; Regulatory Notice 11‐54, November 2011, Branch Office Inspections; and the description of one disciplinary action in which a firm was sanctioned and an individual fined.

Findings

Notice 11‐49: to inform firms of recent developments regarding the application of rules governing communications with the public, FINRA is proving guidance to firms on communication with the public regarding exchange‐traded products, treasury inflation‐protected securities (TIPS), use of “FINRA” in firm trademarks, and identification of related prior filings when submitting new filings for review. Notice 11‐52: FINRA reminds firms of their supervisory obligations regarding the use of certifications and designations that imply expertise, certification, training or specialty in advising senior investors. Notice 11‐54: FINRA and the Securities and Exchange Commission's Office of Compliance Inspections and Examinations provide broker‐dealer firms with information on developing effective policies and procedures for branch office inspections and remind firms of supervisory requirements under FINRA's supervision rule and notes common deficiencies and strong compliance practices. Trade Reporting Notice on TRACE Reporting Issues: FINRA answers selected member firm detailed questions on reporting issues related to The Trade Reporting and Compliance Engine (TRACE), the vehicle developed by FINRA to facilitate the mandatory reporting of over the counter secondary market transactions in eligible fixed income securities. All broker/dealers who are FINRA member firms have an obligation to report transactions in corporate bonds to TRACE under an SEC approved set of rules.

Originality/value

These are direct excerpts designed to provide a useful digest for the reader and an indication of regulatory trends.

Article
Publication date: 12 September 2008

Henry A. Davis

The purpose of this paper is to provide excerpts of selected Financial Industry Regulatory Authority (FINRA) Regulatory Notices issued from April to June 2008 and a sample…

Abstract

Purpose

The purpose of this paper is to provide excerpts of selected Financial Industry Regulatory Authority (FINRA) Regulatory Notices issued from April to June 2008 and a sample of disciplinary actions during that period.

Design/methodology/approach

The paper provides excerpts from FINRA Regulatory Notice 08‐16, Third Party Research Reports; 08‐17, Customer Complaint Reporting; 08‐18, Unauthorized Proprietary Trading; 08‐21, Partial Redemption of Auction Rate Securities; 08‐22, Definition of Public Arbitrator; 08‐27, Midleading Communications about Expertise; 08‐30, Illiquid Investments; 08‐31, Trading Ahead of Customer Orders; and 08‐33, Minor Rule Violation Plan Amendment.

Findings

Useful information may be found in each of these notices.

Originality/value

The paper provides direct excerpts designed to provide a useful digest for the reader and an indication of regulatory trends. The FINRA staff is aware of this summary but has neither reviewed nor edited it.

Details

Journal of Investment Compliance, vol. 9 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

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