More On Legal & Compliancefrom The Advisor's Professional Library
- The Need for Thorough and Effective Policies and Procedures Whethere an advisor is SEC or state-registered, RIAs must revise their policies and procedures to address significant compliance problems occurring during the year, changes in business arrangements, and regulatory developments.
- RIAs and Customer Identification Just as RIAs owe a duty to diligently protect their clients privacy and guard against theft, firms also play a vital role in customer identification. Although RIAs are not subject to an anti-money laundering rule, securities regulators expect advisors to address these issues in their policies and procedures.
The Financial Industry Regulatory Authority (FINRA) brought more enforcement actions against broker-dealers through April 2011 than in the same period for the past three years, according to a Reuters report.
According to Bradley Bennett, the BD regulator's enforcement chief, FINRA has brought 449 cases through April 30, the highest amount for this four-month period since 2007. FINRA also has levied $14.5 million in fines, an increase from the same period last year, Bennett said during a May 18 Securities Industry and Financial Markets Association luncheon in New York.
By comparison, Reuters notes that, according to Bennett, FINRA brought 1,310 disciplinary actions and levied fines totaling $42.5 million for all of last year, compared with 1,158 actions and $48 million of fines in 2009.
Bennett also noted during the luncheon that the bulk of FINRA’s work, 70% to 80%, involves holding brokers accountable for basic rules, from mailing investment disclosures and vetting customers to protecting the privacy of client information.
In a related note, FINRA on May 15 launched the FINRA Disciplinary Actions Online database, a Web-based searchable system allowing investors to access brokers’ disciplinary actions via FINRA’s website at www.finra.org.