Posts by Essential Edge Compliance Outsourcing Services, LLC

First Major Gathering Of Wealth Management Compliance Professionals Since Pandemic, Plus WSR’s Latest Compliance & Regulatory Trends Survey When general industry participants think of wealth management compliance – which is, in effect, only when they must – they tend to envision a very old school, plodding, static field, characterized by unchanging attitudes and older professionals.…

A California court granted the agency’s motion to dismiss a lawsuit from a law firm that wanted clarification as to whether digital assets can be considered securities. A judge has dismissed a case filed by a cryptocurrency law firm against the Securities and ExchangeCommission, according to a ruling California’s Southern District Court filed on Friday.…

In An Age Of Regulatory Harmonization, Financial Advisors Face New Pressures To Weigh Pros And Cons Of Life Settlements For Clients Life settlements might be making a comeback.  Commonly defined as the sale to a third-party investor of an existing life insurance policy for more than its cash surrender value but less than the net…

The oddly named scheme, where a fraudster will bleed the victim’s finances in small increments, akin to fattening up a pig before they’re slaughtered, is gaining ground in the crypto space. A particular kind of scam is hogging the attention of state securities regulators. So-called pig-butchering schemes are becoming increasingly prominent in the cryptocurrency space, and…

A judge ruled that the broker-dealer violated the Advisers Act by failing to properly disclose that its representatives were incentivized to steer clients into certain mutual funds. Commonwealth Financial Network is liable for failing to disclose that its investment advisor representatives were incentivized to sell certain products because of a revenue- sharing arrangement that the…

On February 28, 2023, the Financial Industry Regulatory Authority, Inc. (FINRA) provided anotice relating to social media influencers, customer acquisition and related informationprotection. The notice focused on social media influencers and referral programs as wellas firms’ privacy obligations and summarized some guidance and possible best practices. Withinthe notice, FINRA discussed the need to maintain records…

The regulator’s update to its targeted sweep of firms’ dealings with social media influencers offered suggestions that may be difficult for broker/dealers to fulfill, according to one securities attorney. The Financial Industry Regulatory Authority’s update on its targeted sweep of firms’ dealings with social media influencers includes suggestions that seem borderline unworkable, according to one securities…

An SEC risk alert this week warned firms that surveillance systems fell short in ensuring reps consider costs and reasonably available alternatives. Will enforcement be next? Brokerages need to upgrade their technology to better show their work on meeting Regulation Best Interest obligations, but it remains unclear when the SEC will put teeth into the…

The regulator cited the ‘extraordinary cooperation’ of Securities America, Royal Alliance and SagePoint as the reason for no penalties beyond restitution. Securities America, Royal Alliance and SagePoint will collectively pay hundreds of thousands in restitution to settle disciplinary charges with the Financial Industry Regulatory Authority (FINRA); but the regulator declined to fine the firms, citing their “extraordinary cooperation. 

As firms scramble to stay off FINRA’s new ‘leper list’ of broker/dealers with histories of misconduct, some say smaller businesses and reps with only minor regulatory blemishes are being unduly tarnished. Jonathan Henschen, founder of the recruiting firm Henschen & Associates, recently tried to place an advisor client at a broker/dealer. But the candidate had two FINRA disclosures…