More On Legal & Compliancefrom The Advisor's Professional Library
- The Few and the Proud: Chief Compliance Officers CCOs make significant contributions to success of an RIA, designing and implementing compliance programs that prevent, detect and correct securities law violations. When major compliance problems occur at firms, CCOs will likely receive regulatory consequences.
- Best Practices for Working with Senior Investors Securities examiners deal harshly with RIAs that do not fulfill their fiduciary obligations toward senior investors, as the SEC and state securities regulators view older investors as particularly vulnerable and in need of protection.
New York regulators reached a deal with Merrill Lynch (BAC), Morgan Stanley (MS), UBS (UBS), JPMorgan(JPM), Citigroup (C), Goldman Sachs (GS) and other that will end these firms’ request for opinions from equity analysts — a practice that puts investors at a disadvantage.
Attorney General Eric Schneiderman asked the firms to end their participation in these surveys while he conducts an industrywide investigation into early access to analyst sentiment.
“At my request, these firms have agreed to stop a practice that can offer an advantage to powerful clients at the expense of others,” said Schneiderman, in a press release. “Our markets will only be fair and healthy if everyone plays by the same rules, which is why we will continue to take action against those who provide unfair advantages to elite traders at the expense of the rest of us. I applaud these firms for their leadership and cooperation.”
The interim agreements were reached with Merrill Lynch; UBS Securities LLC; Barclays Capital Inc.; Citigroup Global Markets Inc.; Credit Suisse Securities (USA) LLC; Goldman, Sachs & Co.; J.P. Morgan Securities LLC; Morgan Stanley & Co. LLC; Deutsche Bank Securities Inc.; Jefferies LLC; Stifel, Nicolaus & Co. Inc.; Sanford C. Bernstein & Co. LLC; Keefe, Bruyette & Woods Inc. (a unit of Stifel); Thomas Weisel Partners (also a unit of Stifel); Macquarie Group; Vertical Research Partners; FBR Capital Markets & Co.; and Wolfe Research.
The firms agreed to discontinue or to continue refraining from the practice of cooperating with such surveys and to continue their cooperation with the attorney general’s investigation into the early release of analyst sentiment.
Last month, BlackRock said it would end its practice of systematically surveying Wall Street analysts for their opinions of the firms they cover.
In September 2013, the attorney general outlined his concern about the early release of market-moving data to preferred investors, a practice he dubbed “Insider Trading 2.0.”
The Attorney General’s Office determined in January that BlackRock’s surveys allowed the firm and its traders to obtain information from analysts that could be used to front-run future analyst revisions.
The New York regulators also struck a deal earlier with Thomson Reuters, so the media group would stop selling an early release of consumer survey data to high-frequency traders.