Compliance Newsflash – April 3, 2019

April 3, 2019

Following Reg BI, FINRA may cut suitability rule

On March 27, 2019, Pensions&Investments reported that when the Securities and Exchange Commission finalizes its standards-of-conduct package, the Financial Industry Regulatory Authority will re-examine its suitability rule for broker-dealers, Robert Colby, chief legal officer at FINRA, said Tuesday. 

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A Failure to Supervise: The SEC Casts a Shadow Over Internal Investigations 

On April 2, 2019, Lexology reported that recently, the Securities and Exchange Commission (“SEC”) resolved a pending enforcement action against a financial institution for allegedly failing to supervise a representative’s conduct relating to purported facilitation of manipulative trading through retail accounts. The SEC’s principal charge was that the institution failed to establish clear guidance to its personnel as to how to investigate red flags of potential misconduct (i.e., how to follow up, scope, document, and report the findings thereof), which in the SEC’s view contributed to the institution’s failure to supervise the representative.

For more information, click here.