FINRA

The Financial Industry Regulatory Authority intends to field an enforcement team tasked with focusing on brokers whose records show patterns of complaints or sales abuses. The team will review both the quality of a firm’s due diligence in the hiring process and in monitoring higher risk brokers. For instance, scrutiny will be paid to whether

As we’ve explained repeatedly on this site, every recommendation made or sales strategy employed by a brokerage firm or broker on behalf of a customer must be suitable for that customer. An unsuitable recommendation or strategy can leave the firm or broker civilly liable if the customer incurs damages. FINRA recently issued Regulatory Notice 13-31

Yesterday, we discussed an anti-investor ruling that permits Charles Schwab & Company to force its customers to waive their right to participate in class actions against Schwab. That ruling potentially could lead to such a restriction becoming an industry-wide practice. We mentioned that FINRA might choose to appeal the ruling. The word “might” no longer

In October 2011, Charles Schwab & Company informed its customers that it had amended its account agreement to prohibit customers from either bringing a class action suit against Schwab or participating as a class member in such an action. The amendments also purported to force the customer to agree that arbitrators would be precluded from

Interest rates are near all-time lows. Consequently, whenever rates finally start moving again, we all know they’ll be going up. No one knows for sure when rates will begin to rise, but the Financial Industry Regulatory Authority must be worrying that the day isn’t far off. It’s just released an Investor Alert entitled “Duration – What an

On September 27, 2012, FINRA Chairman and CEO Richard G. Ketchum spoke at the Complex Products Forum sponsored by the Securities Industry and Financial Markets Association (“SIFMA.”) (You can read the speech here).  SIFMA is a trade association and lobbying group that represents hundreds of securities firms, banks, and asset managers, so Ketchum was addressing

The Financial Industry Regulatory Authority (FINRA) announced today that it has censured and fined Merrill Lynch for deficiencies in required disclosure reports and for often failing to file such reports. Merrill was fined $500,000 for its supervisory lapses. The violations, which supposedly went undetected for years, involved non-disclosure or inadequate disclosure of customer complaints, arbitration

Exchange Traded Notes or “ETNs” are unsecured debt obligations typically issued by financial institutions. They differ from traditional bonds because unlike bonds, ETNs don’t pay any interest to investors. The issuer instead undertakes to pay the holder of the ETN at maturity (which can be 10, 30, or even 40 years after issuance) a “distribution”

It has always been our position that a stockbroker owes his or her customer both a suitability obligation under FINRA rules and (at least in our home state of Ohio) the broad duties of a fiduciary under state law. Thus, we’ve consistently asserted in securities arbitrations that any investment-related recommendation must be in the customer’s

The Financial Industry Regulatory Authority (FINRA) has just launched a pilot program specifically designed for large arbitration cases involving claims of $10 million or more, though it can be used in any case, regardless of size. The program enables parties to customize the administrative process and allows them to bypass certain FINRA arbitration rules. In