Where Immigration Policy and Business Realities Converge
Yesterday, the U.S. Securities and Exchange Commission (SEC) ordered a US-based foreign finder operation to cease and desist from operation as an unlicensed broker-dealer. The charges are some of the first against brokers handling investments in the EB-5 Immigrant Investor Program and follow earlier SEC actions against fraudulent EB-5 offerings.
According to the SEC’s order…
After a nationwide conference call of industry participants sponsored by agencies of the U.S. government and several years of cautionary discussions, through its recent actions, the agency that regulates securities sales in the United States, the Securities and Exchange Commission (SEC), and its self-regulatory arm, the Financial Industry Regulatory Authority (FINRA), have made compliance with…
Written by Terry R. Weiss and Matthew S. Johns
In the wake of recent cybersecurity breaches, the SEC and FINRA simultaneously issued reports this week to the securities industry summarizing cybersecurity examination findings and to investors recommending certain precautions to safeguard online investment information.
In its Risk Alert – Cybersecurity Examination Sweep Summary, the SEC describes the results from examinations of more than 100 broker-dealers and investment advisors, the relative split between the two being unspecified. Nevertheless, the findings reveal that the vast majority of broker-dealers and investment advisors have made cybersecurity a priority and implemented appropriate cybersecurity policies and programs. The findings also suggest that broker-dealers have more thorough cybersecurity policies and programs in place than investment advisors.Continue Reading SEC, FINRA Issue Reports on Cybersecurity
Written by Rebecca G. DiStefano
On Dec. 18, 2014, the Securities and Exchange Commission proposed amendments to current rules under Section 12(g) of the Securities Exchange Act of 1934, as amended (the Exchange Act) that would implement provisions of Titles V and VI of the Jumpstart Our Business Startups Act (the JOBS Act). In this…
Written by Richard M. Cutshall and Arthur Don
On Jan. 13, 2015, the SEC’s Office of Compliance Inspections and Examinations released its annual list of examination priorities for 2015. This GT Alert provides an overview of the examination priorities, and highlights how most securities industry participants – registered investment advisers, broker-dealers, registered investment companies and…
Written by Richard M. Cutshall and Steven M. Felsenstein
The role of the Financial Industry Regulatory Authority (FINRA) regarding payments to unlicensed persons for securities-related and capital-raising activities has expanded. This GT Alert gives an overview of the FINRA Rule 2040 (approved by the SEC on Dec. 30, 2014) which governs when and how registered…
Written by Richard M. Cutshall, Steven M. Felsenstein, and Carl A. Fornaris
On Dec. 30, 2014, the SEC approved a proposed rule change pursuant to which FINRA is adopting a revised version of NASD Rule 3010(e) concerning background investigations of proposed registered representatives and adding a new obligation for member firms’ written supervisory…
Section 15(b) of the Securities Exchange Act of 1934 (the Act) requires registration of any broker-dealer effecting securities transactions by means of interstate commerce unless an appropriate exemption is available. In order to register as a broker-dealer in the United States, an application for registration—called Form BD—must be made to the SEC and a self-regulatory organization (SRO), which, in most instances, will be the Financial Industry Regulatory Authority (FINRA).
Form BD asks questions about the background of the broker-dealer and its principals, controlling persons, employees, affiliates, parent entities and subsidiaries. The broker-dealer must meet the statutory requirements to engage in a business that involves high professional standards, and quite often includes the more rigorous responsibilities of a fiduciary. Form BD is filed on FINRA’s Central Registration Database, an online system designed by FINRA and the state regulators to centralize broker-dealer registration. Once filed, the SEC has 45 days to issue an order granting registration or institute a proceeding to determine whether registration should be denied. The SEC does not charge a fee for filing Form BD.Continue Reading Steps to Becoming a Broker Dealer
The Financial Industry Regulatory Authority, Inc. (FINRA) regulates member brokerage firms and exchange markets in the United States.
FINRA is a not-for-profit non-governmental organization that acts as a self-regulatory organization (SRO). SROs were created by the Securities Exchange Act of 1934 to enforce certain industry standards and requirements related to securities trading and brokerage. FINRA is subject to the oversight of the Securities and Exchange Commission (SEC).
FINRA licenses individuals and admits firms to the industry, writes rules to govern their behavior, examines them for regulatory compliance, and disciplines registered representatives and member firms that fail to comply with federal securities laws and FINRA’s rules and regulations. FINRA maintains the Central Registration Depository, a database of all registered individuals and firms. In addition, FINRA provides education and qualification examinations for securities industry professionals.Continue Reading What is FINRA?
In connection with an EB-5 program, foreign investors are offered a special subset of private funds and securities offerings made through regional centers and non-regional centers approved by the USCIS. In certain instances, when the securities are offered or sold by an intermediary, these transactions are subject to US securities laws. There is a significant…
