The head of enforcement for the Financial Industry Regulatory Authority discussed his key objectives aimed at protecting investors in  a recent blog post, AdvisorHub reports. Bill St. Louis, Executive Vice President and Head of FINRA Enforcement, emphasized that FINRA helps ensure that everyone can participate in the securities markets with confidence through the authority’s oversight of member firms’ compliance with FINRA and Municipal Securities Rulemaking Board rules, and federal securities laws and rules. He laid out four main objectives for enforcement: -Protecting investors and mark ..read more

The Securities and Exchange Commission announced that it has penalized five registered investment advisers for violations of its marketing rule, AdvisorHub reports. All five firms agreed to settle the SEC’s charges and to pay $200,000 in combined penalties, while also being censured.  The marketing rule, which was updated in 2020 and took effect in 2022, is designed to comprehensively and efficiently regulate advisers’ marketing communications.  It covers marketing activities by investment advisors to clients and prospective investors in private funds that are managed by the advisors ..read more

The Department of Labor’s proposed new fiduciary rule has moved a step closer to final approval, according to a Financial Advisor report. The White House Office of Management and Budget said it completed its review of the rule last Wednesday. The DOL’s rule would update the definition of an investment advice fiduciary under the Employee Retirement Income Security Act. It would impose the fiduciary standard of federal retirement law on most investment advisors, brokers, and insurance agents making recommendations to retirement plans and plan participants and customers in individual retirement a ..read more

A Florida broker-dealer and its chief executive officer were penalized by the Financial Industry Regulatory Authority over messaging violations, ThinkAdvisor reports. FINRA released a letter of acceptance, waiver and consent in the case of Dawson James Securities, Inc. and its CEO Robert Dawson Keyser Jr.  Under terms of the settlement, the firm has been fined $500,000 while Keyser was fined $10,000 and suspended for one month. FINRA said that from August 2011 through January 2021, Dawson James failed to preserve and review over 10,900 business-related text messages sent or received by at ..read more

The Securities and Exchange Commission announced that it has charged New York-based advisory firm Senvest Management with failing to preserve business-related off-channel electronic communications. The charges involve the period from January 2019 through December 2021, when the SEC alleges that Senvest employees communicated on business matters by text and other platforms not approved by the firm.  Senvest was also accused of failing to maintain or preserve those off-channel communications as required under the federal securities laws and the firm’s policies and procedures. In one instanc ..read more

The Financial Industry Regulatory Authority has issued a cybersecurity alert to member firms to make them aware of an ongoing phishing campaign. FINRA said the campaign involves fraudulent emails purporting to be from FINRA executives and using the e-mail addresses “steve.r@data-finra.org” and “robert.c@data-finra.org”.  The authority said the e-mail addresses and domain “data-finra.org” are not connected to FINRA, and firms should delete all emails originating from these domains. Member firms were advised to be aware that they may receive similar phishing emails from other domain names i ..read more

Financial Industry Regulatory Authority arbitrators sided with a former J.P. Morgan Securities broker in his defamation claim, according to AdvisorHub. Ruling in the case of New York City broker Michael C. Nolan, the FINRA panel ordered J.P. Morgan to pay $250,000 in damages.  Nolan also won the right to have his record expunged of what he said were defamatory allegations by the brokerage firm following his departure. Nolan said J.P. Morgan defamed him in the U5 document that detailed his separation from the firm in 2022. FINRA’s Form U5 tracks, among other things, the employment history ..read more

As more companies incorporate the use of artificial intelligence into their practices, regulators are taking steps to address the growing trend, according a report in Better Markets. One example cited was the Securities and Exchange Commission’s proposed new rules regarding the use of predictive data analytics and artificial intelligence to interact with investors.  Specifically, the rules would require broker-dealers and investment advisers to take certain steps to address conflicts of interest associated with their use of these technologies in order to prevent firms from placing their i ..read more

The Securities and Exchange Commission has decided to stay its new climate-disclosure rules pending an appeals court review of the case, Reuters reports. The rules have been the subject of multiple legal challenges that have now been consolidated in the U.S. Court of Appeals for the Eighth Circuit for its consideration. On March 6, the SEC voted to mandate material climate risk disclosures to investors by public companies and in public offerings. The commission said it was taking the action to enhance and standardize these disclosures as a way to provide investors with more consistent, compara ..read more

FINRA’s Insider Trading Detection Program continues to play a vital role in assisting law enforcement and regulatory investigations, according to a blog post on the authority’s website. It was written by Karen Braine, Vice President, Surveillance and Market Intelligence, Insider Trading Detection for FINRA.  She leads the team that provides U.S. law enforcement and regulators worldwide with actionable intelligence about potential insider trading that occurs on the U.S. markets. Braine noted that in 2023 her team’s program provided intelligence resulting in over 450 referrals, and sai ..read more