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 …
We’re a little behind on our posts lately due to a serious family illness. That’s why we only just saw the May 1 notice from the Financial Industry Regulatory Authority (FINRA) that it recently assessed Citigroup; Morgan Stanley; UBS; and Wells Fargo Advisors a total of more than $9 million in sanctions and restitution for …
In law, the term “expungement” refers to a court-ordered process in which the legal record of an arrest or a criminal conviction is “sealed” or erased in the eyes of the law. For most purposes, someone checking the criminal records will find no evidence of the expunged crime. But the concept of expungement isn’t solely …
We’ve told you in a prior post about BrokerCheck, FINRA’s portal to background information concerning brokerage firms and their registered representatives. FINRA provides information on brokers who are currently registered with FINRA or who have been registered within the last 10 years. A free summary report is delivered immediately online and provides: A listing of the broker’s …
Everyone is reprinting a new story from Reuters about a Stanford Law School/Cornerstone Research study which reports that in 2011, securities fraud settlements in federal courts plummeted to their lowest level in a decade. Various experts are offering their two cents as to why that might be the case. But for individuals whose losses were …
Did you know that FINRA publishes disciplinary actions issued during 2006 or later, as well as opinions issued by the SEC and federal appellate courts that relate to FINRA disciplinary actions that have been appealed? You can find them by searching the FINRA Disciplinary Actions Online database – http://disciplinaryactions.finra.org/ – using any combination of the following criteria: Case …
On July 9, 2012, two new FINRA rules are supposed to take effect: Rule 2090 (“know-your customer”) and Rule 2111 (“suitability rule”). The know-your-customer and suitability rules are probably the second and third most important self-regulatory rules governing the conduct of stockbrokers. (The MOST important rule is the unwritten “prime directive” – keep selling, boys …
