FINRA probes broker/dealers for investment advisory business information

According to Dow Jones, FINRA is verifying the level and scope of investment advisor and hedge fund business being done in conjunction with broker/dealers. The verification is only for select firms. A FINRA spokesman told Dow Jones Newswire the action comes “in light of recent developments” – most likely a reaction to the Madoff scandal, says Brian Rubin, a securities attorney for Sutherland in Washington, D.C.

“If we determine that there are issues in a broker/dealer which we regulate that need follow up activity, FINRA will intiate [an] appropriate regulatory response,” spokesman Herb Perone told Dow Jones Newswires. “If we see any issues outside our reach, we’ll communicate that within the SEC – because we only regulate the broker/dealer.”