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Author: rafferty

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SEC Finds Shady Practices in BDs’ Structured Product Sales

16:37 26 August in In the News by rafferty

August 25, 2015 By Melanie Waddell, ThinkAdvisor   Violations included heavy sales to customers who were elderly, didn't speak English or had a conservative investment objective A recent exam by the Securities and Exchange Commission of 10 broker-dealers’ branch offices revealed “significant deficiencies” in the BDs’ suitability and supervision of sales of structured securities products to investors. Violations included an over-concentration of sales to customers who were non-English speaking, elderly or had a conservative investment objective. One firm had even retroactively changed customers' stated investment objectives in order to sell them more structured products. The SEC’s Office of Compliance Inspections and Examinations released Tuesday a risk alert detailing the findings of exams conducted on 10 branch offices of registered broker-dealers that distribute SSPs issued by their parents or affiliates or by unaffiliated third parties. While significant deficiencies were found...

Financial Advisor IQ a Financial Times Service

Broker-Dealers Facing Scrutiny From Several Regulators

16:58 21 August in In the News by rafferty

August 21, 2015 Financial Advisor IQ   Regulators are not happy with what’s happening in the broker-dealer segment this year. Finra is giving broker-dealers until Sept. 18 to answer questions about compensation and conflicts of interest, ThinkAdvisor writes. Outside auditors of broker-dealers, meanwhile, are taking flak for utterly failing to do their job, Financial Advisor magazine reports. Finra’s questionnaire, limited to the retail accounts managed by broker-dealers, consists of 19 questions about firms’ activities over the past year related to compensation policies, review of supervisors and the role of the board, as well as policies to detect conflicts of interest and methods to curb them, according to ThinkAdvisor. The self-regulator acknowledged “instances of positive change” since its October 2013 report on conflicts of interest, but also said that the issue is a “recurring challenge” that can lead to poor...

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FINRA Sweeping BDs on Comp Practices

16:13 20 August in In the News by rafferty

August 19, 2015 By Melanie Waddell, ThinkAdvisor   Self-regulator wants BDs to answer its questions on how they manage conflicts of interest in compensation by Sept. 18 The Financial Industry Regulatory Authority is sweeping broker-dealers for information on conflicts of interest they have related to their compensation practices. The self-regulator wants BDs to answer 19 questions in writing by Sept. 18. The scope of FINRA’s review is limited to a firm's retail accounts, and will cover activity between August 2014 through July. As FINRA stated in its Annual Priorities Letter, “conflicts of interest represent a recurring challenge that contribute to compliance and supervisory breakdowns which can lead to firms and registered representatives, at times, compromising the quality of service they provide to clients.” While FINRA states that it has “observed instances of positive change since we issued the Report...