Finra Chief Blasts Labor Proposal for Stricter Broker Rules

The head of Wall Street’s self-regulator blasted the Obama administration’s push to impose stricter standards on brokers who handle retirement accounts, saying the rule would make it difficult for smaller investors to get advice. In a speech Wednesday, Financial Industry Regulatory Authority Chief Executive Officer Richard Ketchum said that the Labor Department’s April proposal would create new legal risks for brokers and probably reduce the number of investment options they would offer. The remarks echo the lobbying talking points used by financial companies opposed to the proposal. More on Bloomberg [...]

Hundreds of Older Investors Call New Finra Hotline

A new regulatory hotline for older investors has been getting hundreds of calls from seniors seeking more information about investment products and in some cases reporting broker misconduct or delays in getting problems at brokerages resolved. The Financial Industry Regulatory Authority, Wall Street’s self-regulator, in late April established its toll-free Securities Helpline for Seniors, at 1-844-57-HELPS (1-844-574-3577). As of Tuesday, 350 calls had come in within about four weeks, says Susan Axelrod, Finra’s head of regulatory affairs. Issues raised by callers have ranged from fraud to questions such as “What is an annuity?” Ms. Axelrod says. Callers want to know how to compel brokers to give them access to account documents of deceased parents and how to check a broker’s regulatory record. More in the Wall Street Journal [...]

SEC official blasts waivers for bad-actor banks

A Securities and Exchange Commission official is blasting waivers the financial regulator approved for five banks whose traders manipulated the world’s foreign-exchange market. In an angrily worded dissent, SEC Commissioner Kara Stein refused to support waivers enabling Citigroup, JPMorgan Chase, London-based Barclays, Swiss banking giant UBS and Royal Bank of Scotland to continue normal activities despite the rate-rigging findings. “Allowing these institutions to continue business as usual, after multiple and serious regulatory and criminal violations, poses risks to investors and the American public that are being ignored,” Stein wrote in a statement dated Thursday, one day after the SEC approved the waivers. More on USA Today [...]

Whistleblowers Find SEC Rewards Slow and Scarce

One Sunday afternoon last spring, a Securities and Exchange Commission investigator called Yolanda Holtzee at her Seattle home, asking for her help in catching an alleged con man the press dubbed “the Wolf of Montreal.” Ms. Holtzee had been tracking John Babikian, a Bugatti-driving Canadian accused of multimillion-dollar investment scams, and had tipped the agency about him as part of her longtime interest in fraud in the penny-stock markets. More in the Wall Street Journal [...]

Madoff Trustee Picard Presses Claims Against Defunct Avellino and Bienes

The trustee recovering funds for investors cheated by Bernard Madoff is urging a judge not to dismiss his suit against an accounting firm that had close ties to Mr. Madoff, saying its principals were a “crucial part of the machinery” that kept the Ponzi scheme going. In a Thursday filing with U.S. Bankruptcy Court in Manhattan, lawyers for trustee Irving Picard said the defunct firm, Avellino and Bienes, ran the first feeder funds that pooled investor cash and funneled the money to Mr. Madoff. Frank Avellino, one of the two principals, had a relationship with Mr. Madoff going back to the 1960s, according to Mr. Picard and most public accounts. More in the Wall Street Journal [...]

The Agency That Barely Mov

As the Justice Department, Federal Reserve, and other regulators across the globe prepared the final details of a multibillion-dollar criminal settlement with five Wall Street banks over currency rate rigging, all eyes were on one agency that had the power to throw a wrench into the entire deal. Though a bit player in the negotiations, the politically divided Securities and Exchange Commission had to approve waivers each bank needed to continue to do normal business. The pressure on SEC Chair Mary Jo White was almost palpable, two people involved in the negotiations say, as defense lawyers and prosecutors barraged her staff with inquiries and fellow commissioners weighed in with threats to vote against some of the waivers. Determined not to let the squabbling scuttle the broad settlement, White called a private commission meeting on May 19, when all the waivers were approved. The settlements were announced the next day. More on Bloomberg [...]


H.R. 1982 New CoSponsor
Congressman Christopher “Chris” Smith [R-NJ4] has signed on to support H.R. 1982!
If you reside in Congressman Smith’s district, please take a moment and send a Thank You letter by clicking here. [...]


H.R. 1982 New CoSponsor
Congressman Cedric Richmond [D-LA2] has signed on to support H.R. 1982!
If you reside in Congressman Richmond’s district, please take a moment and send a Thank You letter by clicking here. [...]

FINRA to Toughen Sanctions on Fraud, Unsuitability

The Financial Industry Regulatory Authority said Tuesday that it will call for tougher sanctions for those who commit fraud or make unsuitable recommendations to clients. Plus, it will increase suspensions under the self-regulator’s suitability rules from one year to two years. FINRA said that its National Adjudicatory Council is amending its “overarching principles” that apply to sanctions determinations and is revising its Sanction Guidelines to advise FINRA adjudicators to “strongly consider” barring an individual respondent or expelling a firm for cases involving fraud. More on ThinkAdvisor [...]

SEC reveals factors behind how it picks courts it uses

The U.S. Securities and Exchange Commission released guidance on Friday about how it decides whether to pursue a case in federal court or before an in-house judge, amid complaints by some defendants that the agency’s administrative court violates their rights. The SEC said that while no strict formula exists, it considers factors including what claims it is pursuing, whether a defendant is associated with a registered entity, and the costs and time involved in litigating in a particular forum. The SEC said it also considers bringing a matter before an administrative law judge if a case raised “unsettled and complex” issues under federal securities laws, given the commission’s “expertise concerning those matters.” More on Reuters [...]