A recent study by the Sutherland Asbill law firm
revealed that FINRA brought 4% more disciplinary cases in 2012 as
compared to 2011. In doing so, FINRA jacked up its fines another
15%, for a grand total of $78 million.
Besides FINRA showing it still has muscle to flex, what should
member-firms take away from this development. For one, it is
important to look at the areas of particular focus for FINRA.
Topping the list of enforcement actions were cases that involved
suitability and due diligence; these cases totaled 117 and 62,
respectively. So what should member firms take from this heightened
focus on suitability and due diligence.
Firms should take this opportunity to review its policies and
procedures when it comes to suitability and knowing your
customer. I have prepared
guidebooks that you might find helpful in this regard.
The key to any risk avoidance program is documentation.
Make sure your policies and procedures are well-documented.
In turn, make sure your registered representatives fully document
their suitability analysis and due diligence.
Having robust documentation is not a gurantee that FINRA will
not come a knocking. If they do, well-documented
policies, procedures, suitability and due diligence will go a long
way to avoiding the hammer.
stimates place the amount of money illegally "laundered" through
United States banks in the hundreds of billions of dollars each year.1
For more than five decades, the U.S. government has attacked money
laundering, in part, through anti-money laundering ("AML") disclosure,
monitoring, and reporting requirements placed on financial institutions.
We recently notified you of the FDIC’s Financial Institution Letter 47-2013 , which urges directors and officers of financial institutions to examine their institutions’ directors and officers (D&O) insurance coverage to ensure adequate protection for themselves as well as their depositors and shareholders.
Comments made by Kara N. Brockmeyer, the Securities Exchange Commission’s chief of the Foreign Corruption Practices Act unit, and Charles E. Duross, deputy chief of the Department of Justice’s FCPA unit, at the recent International Conference on the FCPA suggest that both agencies are increasing their scrutiny of possible FCPA violations for the next year.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Last Friday’s edition of the New York Law Journal features an article in its "Outside Counsel" column authored by Mintz Levin colleagues Andrew Roth and Kim Gold, entitled Cracking Down on Executive Compensation for Not-for-Profits.