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

The Securities and Exchange Commission is taking steps to modernize its Internet Adviser Exemption that was adopted in 2002.  The exemption allowed firms that operated primarily online to register with the SEC. The SEC announced that it has now adopted amendments to rule 203A-2(e) under the Advisers Act that involves investment advisers who operate exclusively through the internet.  The commission said these amendments are designed to reform the rule to reflect the broader evolution in technology and the marketplace since its adoption. Under the reforms, an investment adviser relying ..read more

Throughout April, the Securities and Exchange Commission is conducting a number of events to help investors plan for their future as part of ‘National Financial Capability Month’.  The SEC’s Office of Investor Education and Advocacy (OIEA) announced that its theme for the month is, “What does your financial future look like? Having a plan can help answer the question.” The commission said it wants to stress the importance of creating a saving and investing plan to help investors meet their financial goals.  Investor education events are being held across the country this month with v ..read more

A federal appeals court is weighing a case involving a challenge to the Securities and Exchange Commission’s new private fund adviser rules, according to ThinkAdvisor. The U.S. 5th Circuit Court of Appeals heard oral arguments in New Orleans in the lawsuit filed by six private equity and hedge fund trade groups. They allege the rules exceed the SEC’s statutory authority, fail to address the stated objectives, and will harm institutional investors. The SEC adopted the new rules in August 2023, saying the action was aimed at protecting private fund investors by increasing transparency, competiti ..read more