BROWSE BY TOPIC
- Investor Protection
- Investments - Unsuitable
- Investments - Strategies
- Investments - Private
- Bad Advisors
- Bad Brokers
- Boiler Rooms
- Regulatory Sanctions
- Wall Street News
- Rules & Regulations
- Terminations/Cost Cutting
- Compliance Concepts
- General News
- Donald Trump & Co.
- Big Banks
Stories of Interest
- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
- Catherine Keating Appointed CEO of BNY Mellon Wealth Management
- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.
Stay Informed with the latest fanancialish news.
NEWSLETTERS & ALERTS
Small Investment Banking Firm Sloppy with Registrations
by Howard Haykin
WHAT WENT WRONG. Between January 2013 and October 2016 (the "Relevant Period”), 3 individuals employed by the firm were not registered in any capacity, and 1 individual was only registered as a General Securities Rep (Series 7), notwithstanding the fact that all 4 were conducting investment banking activities on behalf of the firm, which required them to pass the Series 79 exam and become registered as Investment Banking Reps.
- These individuals engaged in investment banking on as many as 113 offerings, taking part in various investment banking activities
- e.g., soliciting emerging companies to retain the Firm’s services in preparing for private offerings, conducting investment banking research, creating models and presentations, and developing potential investor lists.
- The Firm was aware that these individuals were involved in investment banking activities and that they were not qualified and registered to engage in such work.
- The Firm incorrectly concluded that the person holding the Series 7 registration was already qualified as an Investment Banking Rep.
- The Firm instructed the other 3 to take the Series 79 exam at various times beginning in August 2013, but then failed to follow up to ensure they had taken and passed the examination.
- None of these individuals ever became qualified as Investment Banking Reps.
FINANCIALISH TAKE AWAYS. Oftentimes FINRA hits firms with “Failure to Reasonably Supervise” based simply on the perception or logic that … had their supervisory policies and procedures (WSPs) been reasonable and adequate, the firm would not have committed the violative conduct. (IN MY VIEW) A TRUMPED UP CHARGE.
Yet, in this case, FINRA's charge is appropriate and well deserved - the firm acted in a sloppy and negligent manner. How else would one describe it when a firm has only 10 registered reps yet somehow loses sight of registration requirements for 4 of its associated persons? THANKS, FINRA, FOR THE PRACTICAL MESSAGE AND CONSTRUCTIVE CRITICISM.
This case was reported in FINRA Disciplinary Actions for January 2019.
For further details, go to ... FINRA Disciplinary Actions Online, and refer to Case #2016048228001.