Posts by Essential Edge Compliance Outsourcing Services, LLC

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…

Smarsh’s Robert Cruz: US Wealth Management Firms Should Be Paying More Attention to Instant Messaging Regulatory Fines for Global Financial Institutions Instant messaging apps continue to rise in use across the world, and that’s causing agita for compliance professionals at major global financial institutions, and the regulators who oversee them – At least in the U.S.…

The initiative effectively extends the online supervision of branch and non-branch operations that Finra allowed during the pandemic. Working from home has lingered beyond the height of the coronavirus pandemic, and it’s likely to change how brokerages supervise their employees. The Financial Industry Regulatory Authority Inc. filed a proposal last Friday with the Securities and Exchange Commission…

SCOTUS Conservative Majority’s Ruling on EPA Has Significant Implications for Wealth Management Regulatory Landscape Wealth management compliance and supervisory professionals worth their salt will constantly observe the political landscape to determine the potential for new rules and regulations.   And if there’s any development worth watching more closely, it’s the Supreme Court’s ruling at the end of…