Newly Created “Capital Acquisition Broker” Rule Reduces Regulatory Burdens on Some Broker-Dealers

Lauren Mack Broker Dealer Registration, Compliance, FINRA, SEC

By Greg Caramenico and Lauren Mack On August 18th, the Securities and Exchange Commission (“SEC”) approved a Financial Industry Regulatory Authority Inc. (“FINRA”) rule that establishes less burdensome regulations for “Capital Acquisition Brokers” (“CABs”), which are a subclass of broker-dealers that engage only in limited activities. CABs can elect to be governed by the new rules by converting their current FINRA membership or by submitting a new …

Private Placements under FINRA Scrutiny

Simon Riveles Broker Dealer Exemption, Broker Dealer Registration, Compliance, FINRA, FINRA Rule 5123, Private Placement, Uncategorized

Peter Tyson and Simon Riveles The Financial Industry Regulatory Authority (“FINRA”) announced in its Annual Regulatory and Examination Priorities Letter from January 11, 2013 that it would prioritize policing private placements in 2013. Of particular concern to FINRA is enhancing its risk-based supervision of the private placement market, and addressing inadequate disclosures and due diligence procedures, which can mislead and/or harm investors. FINRA’s announcement is …

Recent FINRA Anti-Money Laundering Actions against Member Firms

Simon Riveles Anti-Money Laundering, FINRA

Recent penalties imposed by the Financial Industry Regulatory Authority (FINRA) against three companies that failed to implement adequate procedures to detect money laundering demonstrate the agency’s continued attention on anti-money laundering (AML) compliance programs. FINRA levied a total of $900,000 in sanctions and suspensions against Atlas One Financial Group (“Atlas”), Firstrade Securities (“Firstrade”), and World Trade Financial Corporation (WFTC) in addition to four executives associated …

FINRA Outlines 2013 Regulatory Priorities

Simon Riveles Cyber-security, FINRA, FINRA Rule 5123, Hedge Funds, Private Placement, Uncategorized

In keeping with its prior year practice, on January 11, 2013, FINRA (the “Agnecy”) issued a Examination Priorities Letter to member firms highlighting the areas of the industry it intends to focus particular attention and resources. These areas include market regulation, business conduct, insider trading, financial and operational concerns. Market Regulation As computer based trading continues to capture an increasingly large segment of the market, …

SEC Approves New FINRA Member Communication Rules

Simon Riveles Advertising, FINRA, SEC

In April, the SEC approved a significant revamping of FINRA rules regarding member communications with the public (the “New Rules”). The rule changes are a culmination of a multi-year effort by FINRA to update, harmonize and consolidate various NASD rules and interpretations regarding communication and advertising rules. New Communication Categories One of the most significant changes brought about by the New Rules is the consolidation …