A recent enforcement action offers a glimpse of the Financial Industry Regulatory Authority’s (“FINRA”) expectations for firms conducting anti-money laundering (“AML”) due diligence and transaction monitoring.  On July 27, 2020, FINRA settled with broker-dealer JKR & Company (“JKR”) over allegations that the firm failed to detect, investigate, and report suspicious activity in four customer accounts in violation of FINRA Rules 3310(a) and 2010.  JKR agreed to a $50,000 fine and a censure to resolve the matter.  The settlement is notable in that FINRA applied transaction monitoring and due diligence expectations common in the banking industry to a broker-dealer.  It also serves as a reminder that FINRA expects member firms to not only establish written AML policies and procedures, but also to put their AML programs into practice in order to meet their regulatory obligations.
Continue Reading FINRA Settlement Highlights Importance of Anti-Money Laundering Due Diligence and Monitoring

In response to the outbreak of COVID-19, FINRA has announced that most FINRA staff will be working remotely, but will utilize remote work capabilities to remain “fully operational.” FINRA has also published guidance on its website regarding narrow regulatory relief, business continuity, arbitration, mediation, and disciplinary hearings, membership applications, FINRA-administered exams, events, and investor strategy.
Continue Reading FINRA’s COVID-19 Response

The Securities and Exchange Commission (“SEC”) and Financial Industry Regulatory Authority (“FINRA”) recently issued guidance in connection with firms’ relationships with third-party service providers.  These publications serve as a reminder
Continue Reading SEC and FINRA Signal Renewed Focus on Vendor Management in Two Key Areas: Cybersecurity and Market Access Rule Compliance

On April 10, 2017, Neil Gorsuch was sworn in as the Supreme Court’s 113th justice. While his experience on the Tenth Circuit Court of Appeals with cases involving financial regulation may be limited, certain of his decisions reflect an identifiable hostility towards executive agencies that, in his view, act in excess of the powers accorded them by statutory and constitutional law. These decisions suggest that the High Court’s newest justice will keep a close eye on how financial regulators go about their business.
Continue Reading Financial Regulators Take Note: The Supreme Court’s Newest Member is a Tough Taskmaster

Earlier this month, FINRA announced changes to its Sanction Guidelines through Notice to Members 17-13. FINRA’s Sanction Guidelines are used by FINRA disciplinary hearing panels to decide what, if any, sanctions to impose in those enforcement actions in which a rule violation is found. FINRA enforcement staff and members of the defense bar utilize the guidelines in settlement negotiations.
Continue Reading FINRA Updates Its Sanction Guidelines