Compliance

For Small BDs And Clearing Firms, FINRA Legal Action Serves As a Cautionary Tale On Anti-Money-Laundering Compliance

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FINRA announced yesterday that it imposed a $1 million fine on a Nebraska clearing firm for repeatedly violating anti-money laundering (AML), financial reporting and supervisory requirements.  The announcement serves as a good checklist for compliance and supervisory personnel about the types of matters FINRA may investigate during firm audits.  

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RIA Fires Google Apps After Google Notifies Advisor Of A 15-Month Failure In Gmail's Archiving System; Gmail Archiver Accidentally Deleted Messages It Was Supposed To Retain

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An Investment Advisor rep with a background as a programmer recently replaced Google Apps' email archiving system after being notified that Gmail's archiver accidentally deleted messages that should have been retained for the 15-month period from March 28, 2012 to June 18, 2013.    Google notified the advisor on September 5 of the failure, gave him a refund, and apologized profusely. In a lengthy mea culpa to Gmail archiving users affected by the failure, Google said it has rectified the problem and lists numerous steps it has taken to reduce the risk of another such failure. (The e

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FINRA Announces Escalation of High-Risk Broker Program

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Facing government pressure to crack down on the industry's most problematic registered representatives, FINRA announced a program in February 2013 to focus on what it deems "high-risk brokers."  Now FINRA is expanding the program.

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An Open Letter To SEC Chair Mary Jo White: Please Modernize The RIA Testimonial Rule So That Consumers Could Rely On The Web To Connect Them With The Best Advisors

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Dear Mary Jo:   The Securities and Exchange Commission needs to modernize – or at the very least provide greater clarity -- about its rule prohibiting RIAs and IA reps from using anything approaching a testimonial in their advertising. I know you're pretty busy but please read through what I am saying because I have a good point.   The current rules on social media use by RIAs are stifling competition and preventing the best advisors from helping more consumers. I’m not a libertarian and I’m not invested in any political party’s agenda. But I do know about

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SEC Bars Four CPAs For Audit Failure; Rare Prosecution Of CPA Auditors For Failing To Fulfill Their Professional Obligations Raises A Question For Financial Advice Professionals

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Three New York CPAs today were prohibited from practicing before the Securities and Exchange Commission for at least five years, and another was barred for at least three years. Should it have been a lifetime bar?   It's rare that the SEC bars a CPA from a small audit firm because it is usually too difficult to establish that the accountant should have known a fraud was amiss. If someone is intent on fraud, it can be hard to detect. However, in this case the most basic financial facts about the company appear not to have been verified by the auditors.

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