More On Legal & Compliancefrom The Advisor's Professional Library
- How to Avoid Sabotaging Your Compliance Exam There is much more to compliance examination survival than knowing all of the rules. It helps to understand why the rules were put in placeand to recognize that examiners are not the enemy.
- Agency and Principal Transactions In passing Section 206(3) of the Investment Advisers Act, Congress recognized that principal and agency transactions can be harmful to clients. Such transactions create the opportunity for RIAs to engage in self-dealing.
New SEC Chairman Mary Schapiro promises better enforcement from the Commission, but the securities law firm Sutherland Asbill & Brennan's annual analysis of litigated disciplinary proceedings brought by the SEC and FINRA against broker/dealers and registered representatives shows that it sometimes pays for B/Ds and reps to litigate against the regulators.
Of the 86 charges that were litigated by the SEC and FINRA during the year ended September 30, 2008 (the SEC's fiscal year), firms and representatives succeeded in getting charges dismissed 16% of the time, Sutherland's study found. SEC respondents had slightly more success (approximately 19%--5 of 26) than FINRA respondents (15%--9 of 60). "The success that FINRA respondents had marked an improvement compared with prior years going back to January 2000," the study said. "Historically, the average dismissal rate for FINRA charges has hovered around 11%."