News & Events –

Over the last month, FINRA issued guidance on anti-money laundering compliance and customer communications concerning departing registered representatives. FINRA also proposed a rule adding obligations to firms with a significant history of misconduct. In this article we take a closer look at these moves and the stepped-up expectations that flow from them.

In a new Regulatory Notice, FINRA provided guidance on reporting and monitoring suspicious activities under a member firm’s anti-money laundering (“AML”) compliance program.

Continuing in its efforts to prioritize the protection of retail investors, the SEC’s Office of Compliance Inspections and Examination (OCIE) has issued a new Risk Alert highlighting privacy and information security issues raised during examinations of registered investment advisers and broker-dealers. In this article, Bates Research takes a closer look at the new Alert and the OCIE’s emphasis on improving firms' compliance in safeguarding their clients' personal information.

The SEC's Enforcement Division has now initiated investigations against firms that did not self-report by the deadline of the SEC’s Share Class Selection Disclosure Initiative. Whether you are facing an enforcement or remediation effort, Bates can help.

On April 15th, the New Jersey State Bureau of Securities proposed applying uniform fiduciary standards to broker-dealers and investment advisers. Promoted by Governor Phil Murphy (pictured), the proposed rule would deem any breach of fiduciary duty owed to a customer under the proposed regulation a “dishonest and unethical practice.” In this article, Bates describes the state's proposal and considers some of the implications and reaction to New Jersey's move.

Longstanding opposition to mandatory arbitration is finding renewed momentum as federal legislators introduce bills to limit or even eliminate the binding provisions in consumer, employment and financial contracts. In this article, Bates Research looks at the new legislation targeting mandatory arbitration agreements, some reactions by industry groups and recent developments on the broader subject, including yesterday’s U.S. Supreme Court arbitration decision and continued pressure on FINRA.

Bates is proud to introduce four new experts and consultants: Jennifer Bergenfeld, Pamela O’Neill, Matthew Sekerke and Phil Swatzell.

Bates Group congratulates President Benjamin Pappas on his recognition as a 2019 "Forty Under 40" business leader by the Portland Business Journal.

In June 2018, Bates Group published an article reporting on deficiencies identified by FINRA in its exam findings which may trigger further scrutiny. In that article we noted FINRA’s focus on the Uniform Transfer to Minors Act (UTMA), among other exam topics. That scrutiny has now arrived in the form of FINRA inquiries/investigations into how accounts for UTMA and Uniform Gifts to Minors Act (UGMA) accounts are handled at financial services firms.

Bates Research interviews our most senior experts to get their perspective on the latest regulatory and compliance concerns affecting clients today. We sat down with R. Gerald (“Jerry”) Baker, a Consultant with Bates Compliance Solutions, and an expert with over 45 years of financial services and compliance experience, and asked him to share his observations on some of the current challenges confronting broker dealers and RIAs.

On March 13, 2019, the U.S. House of Representatives adopted a resolution, sponsored by House Financial Services Committee (HSFC) Chair Maxine Waters, declaring that “the lack of sunlight and transparency in financial transactions poses a threat to our national security and our economy’s security.” On the same day, a subcommittee of the HFSC considered legislative proposals aimed at modernizing the Bank Secrecy Act (BSA) and closing loopholes in the Anti Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework, including building on the use of beneficial ownership information collected under Customer Due Diligence (CDD) rules that went into effect last year. In this article, Bates Research continues its review of developing Congressional legislative efforts to detect and deter financial crime.

Bates Group Director Joseph “Joe” Thomas, Senior Investor Expert, will be speaking at the SIFMA Senior Investor Protection Workshop, April 3rd at Edward Jones in Tempe, AZ, on the panel “Protecting Your Senior Clients: Prevention, Identification and Action.” Panelists will discuss promising practices to help prevent, spot and address situations of financial exploitation and cognitive decline.

The North American Securities Administrators Association (NASAA) has been in the public eye this month as state regulators (i) issued a set of federal legislative priorities and (ii) provided written testimony to the U.S. House Financial Services Committee concerning the need for greater clarity on the SEC proposed Regulation Best Interest. In this article, we look at NASAA’s 2019 legislative and regulatory priorities and summarize NASAA president Michael Pieciak's (pictured at left) latest take on the SEC’s efforts to find an acceptable compromise on broker standards of conduct.

260 Global Defendants said to have Targeted 2 Million Americans, Mostly Elder

On March 7th, federal and state enforcement agencies announced they had embarked on a massive crackdown on financial fraud directed at seniors. As part of the “sweep,” the Justice Department reported the filing of criminal or civil charges against hundreds of alleged offenders as well as the launch of targeted public education efforts throughout the country. According to the United States Attorney General, the coordinated actions reached into every federal district across the country and served to underscore the government’s efforts to protect a vulnerable population and address this complex and widespread problem.

In our last post, Bates Research highlighted the CFPB's analysis of five years’ worth of SARs data relating to elder financial exploitation. The use of the information contained in these filings represents an attempt by regulators to create and use data to better understand the scope of the problem and to inform enforcement and public education efforts. In this article, we look at current efforts on the enforcement side, as represented by the actions undertaken last week.

This week at Bates Group: CEO Jennifer Stout is recognized by the Florida Securities Dealers Association in their March Member Spotlight, Managing Director Alex Russell is quoted in an Investment News article about 529 plan costs, and Susan Harper will be hosting a chat with the Attorney General of New York, Letitia James, at the NYSBA Women in Law Section's inaugural Trailblazer event on March 13, 2019. Bates Group will also be exhibiting at the 2019 IAA Compliance Conference March 14-15 in Washington, D.C.

FINRA’s 529 Share Class Initiative self-reporting deadlines have been pushed back one month to allow firms additional time to review their supervisory systems, procedures and past transactions to identify sales of 529 plan share classes. The extension also allows firms more time to consider additional information made available by FINRA (FAQs) and to determine whether to self-report.