On August 22, 2025, a broker faced a four-month suspension from the securities industry after regulators found he had allocated up to 91% of a client’s net worth into illiquid alternative investments. The broker, based in suburban Dallas, was also fined $10,000.00, according to his BrokerCheck profile. Most firms limit alternative investment allocations to around…
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The Securities Industry and Financial Markets Association (SIFMA), a trade association representing broker-dealers, investment banks, and asset managers, submitted a thoughtful and pragmatic letter to FINRA on July 11, 2025, proposing five critical reforms to enhance the fairness, efficiency, and professionalism of FINRA’s arbitration process. These proposals aim to modernize the system, ensuring it meets…
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The number of brokerage firms in the United States continues to shrink, even as fee-only advisory firms gain momentum—a sign of how quickly the financial services industry is moving away from commission-based business models. According to the Financial Industry Regulatory Authority’s (FINRA) 2025 Industry Snapshot, the number of registered broker-dealers dropped to 2,840 at the…
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The Financial Industry Regulatory Authority, Inc. (“FINRA”) has published its 2025 Annual Regulatory Oversight Report (the “Report”). This year, the Report adds new topics relating to the third-party risk landscape, registered index-linked annuities and extended hours trading. The Report also includes new content on various topics from last year’s report, including cybersecurity, artificial intelligence (“AI”)…
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In a sweeping policy shift, Securities and Exchange Commission (SEC) Chair Paul Atkins announced a plan to modernize the agency’s regulatory approach to cryptocurrency, signaling a more accommodating stance for digital asset innovation while reaffirming the SEC’s oversight responsibilities. Speaking at a roundtable hosted by the SEC’s crypto task force, Atkins made clear that one…
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On March 3, 2025, the Securities and Exchange Commission’s (SEC) Division of Corporation Finance announced significant enhancements to its confidential filing process for draft registration statements. These changes aim to facilitate capital formation while maintaining robust investor protections. Evolution of Confidential Submissions The concept of confidential submissions was introduced under the Jumpstart Our Business Startups…
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The Financial Industry Regulatory Authority (FINRA) has initiated a comprehensive review of its regulatory framework, aiming to modernize rules to better align with the evolving dynamics of the financial industry. This initiative underscores FINRA’s commitment to maintaining effective and efficient regulations that protect investors and ensure market integrity. Central to this process is the solicitation…
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The U.S. Securities and Exchange Commission (SEC) has charged two major financial advisory firms, Wells Fargo and Merrill Lynch, with compliance failures related to their cash sweep programs. The firms have agreed to pay a combined $60 million in penalties as part of a settlement. The SEC found that both companies failed to implement adequate…
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A panel of three judges in the Fourth Circuit in the case of Frank Black & Southeast Investments N.C., Inc. v. FINRA dismissed a constitutional challenge to FINRA’s authority to regulate and punish security brokers. The panel determined that it lacked jurisdiction to render a decision on the basis that the prior Order underlying the…
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On December 11, 2024, the U.S. Securities and Exchange Commission (SEC) imposed a $15 million fine on Morgan Stanley for its failure to adequately protect client accounts. The fine stems from the firm’s failure to implement proper safeguards, which led to the exposure of sensitive client information and unauthorized transactions. The SEC’s investigation revealed the…
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