Articles Posted in FINRA

On February 5, 2018, a new FINRA rule geared towards preventing financial exploitation of seniors  – also called elder financial abuse – goes into effect. This is new Rule 2165, which creates a limited safe harbor for brokers to put a temporary hold on certain disbursement requests from a brokerage account. The rule “permits members…

This past Thursday, the same day I posted about a recent FINRA Investor Alert regarding cryptocurrency, there was a new press release from the North American Securities Administrators Association (NASAA) with further guidance on the same topic. NASAA’s analysis and warning amounts to this:  Initial Coin Offerings (“ICOs”), and all other investment products related to…

FINRA recently released an Investor Alert on cryptocurrency scams. Investors should be wary of jumping into this “hot,” volatile sector, and do their research before handing over their money to a potential fraudster, or for a risky investment that they don’t understand. In the last quarter, cryptocurrencies such as Bitcoin and Ripple have received a…

On December 21, 2017, the Financial Industry Regulatory Authority (FINRA) announced it had fined brokerage firm Raymond James Financial Services, Inc. $2 million for significant supervisory failures in reviewing email communications. FINRA found that, over a nine-year period, Raymond James did not have a reasonably designed supervisory system and procedures for reviewing email communications. Why…

We are sometimes asked whether FINRA arbitrations are public.   Anyone can go to a courthouse and observe a hearing or trial unless there are good reasons for the court to order the proceeding closed to the public. However, FINRA arbitration hearings are private proceedings.   That means that only the parties and their attorneys, expert witnesses…

FINRA announced on March 26, 2015 that it had fined brokerage firm Oppenheimer & Co. Inc. $2.5 million and ordered it to pay $1.25 million in restitution based on failing to supervise its former registered representative Mark Hotton.  Hotton was permanently barred from the securities industry in August, 2013 after stealing money from his clients…

Investor Choice. Since 1987, when the Supreme Court decided McMahon v. Shearson Lehman Brothers, investors have been denied their Constitutional right to a jury trial. Instead, if they have lost money through the fraud or negligence of a FINRA-licensed stockbroker, financial advisor or brokerage firm, investors are required to bring their cases through the FINRA…

The FINRA Investor Education Foundation issued a new research report, “Non-Traditional Costs of Financial Fraud,” based on a survey of 600 self-reported fraud victims. The survey details the emotional tolls and indirect costs (bounced checks, lost wages, lost opportunities, bankruptcy filings) that may come from losing money in a fraud. Victims who lost the greater…

Investment News reported today that SWS Financial Services is facing charges regarding its sale of variable annuity applications. The Financial Industry Regulatory Authority’s (FINRA) complaint alleges that SWS gave the go ahead on numerous variable annuity applications without principal review for suitability. FINRA requires that firms have supervisory systems and written procedures to supervise VA…

Page one of the Wall Street Journal today reports a devastating truth: Brokerage reports are full of holes . Criminal charges, bankruptcy filings, tax liens, and a host of other complaints and violations are missing from the reports on stockbrokers that are available on FINRA’s brokercheck website, The Wall Street Journal article, entitled Stockbrokers Fail…