FINRA Conducting Swath Of Investigations To Get To Know Broker-Dealer Practices

Friday, August 10, 2012 06:23
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FINRA Conducting Swath Of Investigations To Get To Know Broker-Dealer Practices

Tags: FINRA | independent broker-dealers | regulation

FINRA is conducting a wide sweep of investigations of broker-dealers on conflicts of interest. FINRA claims it simply wants to get to know broker-dealer practices better. But industry attorneys say FINRA could be ramping up for increased enforcement actions.

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The focus of the investigations is to determine how firms manage conflicts of interest and whether those conflicts actually place the firm’s interests ahead of their clients’. FINRA says it wishes to better understand whether firms are taking appropriate actions to appropriately identify and manage conflicts that would affect either their clients or the marketplace.
 
The letter sent out to firms under investigation is unclear about FINRA’s true intentions. It doesn’t clarify whether FINRA is creating new rules or looking for violators of existing ones. Observers feel FINRA has already made judgment on the firms under investigation and that it is simply looking to substantiate its cases.

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