BROWSE BY TOPIC
- Bad Brokers
- Compliance Concepts
- Investor Protection
- Investments - Unsuitable
- Investments - Strategies
- Wall Street News
- Investments - Private
- Rules & Regulations
- Bad Advisors
- Boiler Rooms
- Terminations/Cost Cutting
- General News
- Donald Trump & Co.
- Big Banks
- Regulatory Sanctions
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
The Graying of America – Impact on FINRA Disciplinary Actions
by Howard Haykin
Read today’s Financialish case study about exercising discretion without written authorization (80 Years of Experience, Yet No Leniency from FINRA in Meting Out Sanctions), and you’ll learn how a phone call to FINRA’s Senior Helpline prompted the regulator to launch an investigation into whether a Morgan Stanley broker had wrongfully traded in the account of an elderly investor.
That call was placed by an individual who said the broker had placed trades in an account belonging to his mother without first speaking to his mother. As it turned out, the mother (and other MS customers) apparently gave the broker verbal authority to use discretion in their accounts. However, Morgan Stanley never gave this broker its permission to make trades on a discretionary basis, meaning that he was clearly in the wrong.
THE GRAYING OF AMERICA. Okay, since trading on verbal authority is ‘same-old-same-old’ - what’s new or different about this case? How about … 'alerts to FINRA’s Senior Helpline', a term that typically pops up only in FINRA Investor Alerts. But that’s likely to change.
As elderly investors live longer, their caregivers – in particular, their ‘baby boomer’ children – are going to be more involved in managing their parents’ financial assets. And they’ll pounce (or should pounce) whenever anything seems ‘out of the ordinary - which is more likely to happen because ...
- Caregivers aren't aware of verbal arrangements between a broker and his or her elderly investors.
- Caregivers are not fully aware of the long-term, trusted relationship that many brokers have had with their elderly customers.
- An elderly investor (with short-term memory lapses) may not recall having given authorization or approval to a broker, especially when questioned about specific transactions.
It all adds up to elevated risks for firms and their brokers. Which makes it incumbent on multiple players in a broker-dealer to be on guard for instances of violative conduct – real or perceived.
The above case was reported in FINRA Disciplinary Actions for January 2019. For details, go to ... FINRA Disciplinary Actions Online, and refer to FINRA Case #2017055321601.