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FINRA’s New Public Arbitrator Rules Make Little Sense: Compliance Pros

21:39 04 June in In the News by rafferty

June 4, 2013 By Melanie Waddell, AdvisorOne Arbitrators that have no understanding of the industry are ‘virtually incapable of making decisions that are objective and educated,’ says Henschen Compliance professionals are questioning the merits of new FINRA rules that prevent people associated with mutual funds and hedge funds from serving as public arbitrators. The Securities and Exchange Commission recently approved FINRA’s new rules, which become effective on July 1, and respond to concerns raised by “investor representatives” about such persons’ neutrality. In addition, FINRA amended the public arbitrator definition to add a two-year “cooling off” period before FINRA may permit certain individuals to serve as public arbitrators. Other excluded persons include investment advisors, attorneys who work in the securities industry, and directors and officers of firms in the securities industry. But Cipperman Compliance Services issued a statement...

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Questions raised about broker-dealer’s financial health

15:35 31 May in In the News by rafferty

May 30, 2013 by Bruce Kelly, Investment News Rep, recruiters say firm informed advisers it is in violation of net-capital requirements Allied Beacon Partners Inc., a midsize independent broker-dealer with 200 registered reps, informed its advisers yesterday that the firm is in violation of industry rules requiring that sufficient capital be kept on hand to remain open for business, according to a rep at the firm, who spoke on the condition of anonymity. While the broker-dealer remains open — and brokers can make unsolicited sales of securities for clients looking to cash out of positions — reps no longer buy securities for their clients. Other industry participants echoed what the rep told InvestmentNews about the status of the B-D. “I've spoken to a number of producers and producer groups, and it's my understanding that the advisers were...

Is Your Broker-Dealer a Screaming Eagle or a Box Wine?

14:58 31 May in Articles Written by Jon Henschen by rafferty

May 22, 2013 by Jon Henschen, as published on AdvisorOne In the wine industry, few captivate a cult following quite like Screaming Eagle Cabernet. If you’re not familiar with Screaming Eagle Cabernet, it’s a legendary cult wine produced by Screaming Eagle Winery in the Oakville region of Napa Valley in California. Screaming Eagle Wines are sold by subscription only, with no tasting rooms or ability to visit the winery. The label’s extreme popularity has caused a waiting list just to get on the subscription list, and each vintage is pre-sold. A bottle of Screaming Eagle will set you back $750, with subscribers often times flipping their purchase for $1,500 or higher. (The winery has been known to drop subscribers if they get wind that you’re immediately reselling their wine.) In 2001, a six liter...

FINRA Pulls Plug on BrokerCheck Social Media Plan

15:27 25 April in In the News by rafferty

April 24, 2013 by Melanie Waddell, AdvisorOne Linking to BrokerCheck on sites like Twitter would be ‘unworkable,’ FSI says After complaints, the Financial Industry Regulatory Authority on Wednesday withdrew its proposed rule that would have required advisory firms to include a reference and a link to BrokerCheck on their websites. FINRA had asked the Securities and Exchange Commission last September to approve further amendments to BrokerCheck that would have required advisors to include a BrokerCheck website link. A FINRA spokesperson told AdvisorOne that FINRA withdrew the filing “in order to give further consideration to the comments received in response to the SEC’s publication of the proposed rule change,” and that FINRA plans to refile its proposal. David Bellaire, executive vice president and general counsel for the Financial Services Institute, told AdvisorOne on Wednesday that FINRA’s proposal, in its...