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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NASAA recently announced proposed amendments that aim to prohibit the use of “advisor” or “adviser” titles by brokers. The regulatory coalition is attempting to curtail the use of the titles by individuals that lack the investment adviser licensure. The new amendment is a part of NASAA’s response to the SEC’s 2019 Regulation Best Interest rule….
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Canada-based TD Bank pleaded guilty to conspiracy to commit money laundering. The bank is the largest to do so and will pay approximately $3 billion in a settlement with U.S. authorities who said that the financial institution’s lax practices allowed significant money laundering over multiple years. “TD Bank created an environment that allowed financial crime…
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The Securities and Exchange Commission (“SEC”) has fined nine registered investment advisors (“RIA”) which purportedly violated the SEC’s Marketing Rule. In a statement, the SEC announced it has settled charges against RIAs that allegedly distributed advertisements containing untrue or unsubstantiated claims, as well as testimonials, endorsements, or third-party ratings without the required disclosures. According to…
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The Securities and Exchange Commission (SEC) has announced charges against broker-dealers, investment advisers, and dually-registered broker-dealers and investment advisers for failures to maintain and preserve electronic communications. The firms charged have admitted their conduct violated the recordkeeping requirements of federal securities laws, agreed to pay approximately $400 million in combined fines, and begun implementing new…
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The United States Supreme Court recently released two decisions which will impact the application of the Administrative Procedure Act and curb the Securities and Exchange Commission’s (SEC) enforcement of civil penalties. These decisions are likely to have far-reaching implications across the country, from securities rules to environmental regulations and healthcare costs. Loper In Loper Bright…
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The Securities and Exchange Commission (the “SEC”) has announced settled enforcement proceedings against audit firm BF Borgers CPA PC and its owner, Benjamin F. Borgers (together, “BF Borgers”), charging them with deliberate and systemic failures to comply with Public Company Accounting Oversight Board (“PCAOB”) standards in its audits and reviews of hundreds of public companies,…
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