Friday, June 30, 2017

Supreme Court Limits SEC's Disgorgement Powers

In a highly anticipated ruling, the U.S. Supreme Court limited the power of the Securities and Exchange  Commission (SEC) to recover profits garnered from illegal conduct. The SEC has long relied on disgorgement in cases involving broker misconduct.

In a unanimous decision, the high court ruled that the SEC must abide by a five-year statute of limitations in seeking disgorgement in securities fraud cases.
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Tuesday, August 9, 2016

FINRA Fines Cetera $75,000 For Failure to Meet Notice Requirements

What customer account record requirements must broker/dealers comply with under current securities law?

FINRA recently fined Cetera Investment Services $75,000 for allegedly failing to notify clients of changes to their account records, as required by current securities law.  Between October 2008 and November 2013, close to 60,000 notifications about changes to client account records, including the names, addresses, and investment objectives of accounts, were not sent to the appropriate customers. 

Under current securities law, investment firms must create and maintain an account record for each customer and notify them of any changes.  Apparently, Cetera received some complaints in 2008 from former customers who said they were still receiving notices.  Cetera used a computer code to stop the notices from going out to former customers, but it inadvertently prevented some current customers from receiving necessary notices as well.

Read more . . .

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