Blog - Investor/Financial Advisor Legal Alert


Avoiding or Reducing FINRA Fines With “Extraordinary Cooperation” Jul 15, 2019

The Financial Industry Regulatory Authority (“FINRA”) issued Regulatory Notice 19-23 (the “Notice”) on July 11, 2019 to update its guidance regarding the circumstances by which an individual or firm could influence an enforcement investigation and potentially avoid enforcement fines by exhibiting “extraordinary cooperation”. The Notice provides supplemental guidance on what can...

Proposed New FINRA Rule on Firms with a Significant History of Misconduct May 3, 2019

The proposed rule could require a high-risk firm to deposit a specific amount of cash or qualified securities into a separate account at a bank or clearing firm, which could not be withdrawn without FINRA’s prior written consent. The proposal also aims to preserve funds for payment of arbitration awards. According...

Wall Street Regulator FINRA Strengthens Its Sanction Guidelines against Brokerage Firms and Registered Reps May 13, 2015

The Financial Industry Regulatory Authority (FINRA), the largest independent regulator for all securities firms doing business in the United States, announced on May 12, 2015, that, effective immediately, it has instituted stiffer penalties for brokerage representatives and brokerage firms who commit fraud or violate suitability rules. FINRA stated that “for individuals...

Broker-Dealer LPL Financial to Pay $11.7 Million to Settle FINRA Charges of Widespread Supervisory Failures Related to Complex Products Sales, Including ETFs, Variable Annuities and Non-traded REITs May 6, 2015

            The Financial Industry Regulatory Authority (FINRA) announced today that it has censured LPL Financial LLC and fined it $10 million for broad supervisory failures in a number of key areas, including the sales of non-traditional exchange-traded funds (ETFs), certain variable annuity contracts, non-traded real estate investment trusts (REITs) and...

Appellate Division of NY Supreme Court Tosses $10.8 Million FINRA Investor ARB Award Against Citi Based on Manifest Disregard of the Law and Prior Settlement Apr 13, 2015

A New York Appeals Court affirmed a New York Supreme Court decision to vacate a $10.8 million FINRA arbitration award to a former Citigroup customer, finding that the arbitrators failed to enforce a settlement between the parties that was reached before arbitration took place. Interestingly, the Court also noted that...

Former Credit Suisse AG Bankers Avoid Five-Year Prison Sentence in U.S. Tax Evasion Case After Cooperating with DOJ Mar 30, 2015

Two former Credit Suisse AG bankers (who are both Swiss residents-one of whom is 72 years old), plead guilty to helping Americans evade taxes in a criminal case pending in Virginia. They are among eight former employees facing U.S. tax-evasion charges in Virginia case since 2011. They will avoid prison...

FINRA Panel Suspends Broker In Market Manipulation Case After Pleading Fifth Amendment During Testimony Mar 16, 2015

The FINRA Department of Market Regulation requested an on-the-record testimony of a representative at Lek Securities Corporation regarding an investigation into possible market manipulation. During the testimony, the Lek representative invoked the Fifth Amendment to the U.S Constitution and refused to answer questions on the basis that FINRA is not...

FINRA Fines Wall Street Banks $43.5M for Research Analyst Conflict of Interest in Toys “R” Us IPO Dec 11, 2014

FINRA announced today that it has fined 10 investment banks a total of $43.5 million for allowing their equity research analysts to solicit investment banking business and for offering favorable research coverage in connection with the 2010 planned initial public offering of Toys"R"Us.The banks promised favorable research to Toys “R”...

Commodity Futures Trading Commission Teams Up with SEC and FINRA to Combat Investor Fraud Nov 20, 2014

Top financial regulators are joining forces to offer investors a one-stop online location where they can research the background of financial advisers and learn about financial fraud. On Wednesday, the Commodity Futures Trading Commission launched CFTC SmartCheck, a website that educates financial consumers about ways they could get swindled. The...

Ex-Schwab Broker Barred for $1M Office Supply Heist Nov 19, 2014

FINRA has permanently barred a former Charles Schwab & Co. Inc. broker after he allegedly stole around $1 million in office equipment from his former firm. According to a letter of acceptance posted to FINRA’s disciplinary database, Jeffrey Grove, a financial consultant in the Melbourne, FL office, used the firm's...