FINRA to Revive Proposal Mandating that Brokers Disclose Recruitment Incentives
The Financial Industry Regulatory Authority has decided to revive a proposal that would obligate brokers to notify clients of any incentives they received for being recruited by another firm. The self-regulatory organization had withdrawn the rule in June after getting over 180 comment letters.
Now, however, according to the agenda for FINRA’s next board meeting, the SRO intends to look at a revised recruitment practices policy that would make the recruiting firms delineate their compensation packages to clients who are thinking of moving their assets from the a broker’s previous firm to the financial representative’s new firm.
Also during the meeting, the SRO intends to look into possible rule-making initiatives for alternative trading systems, including dark pools that would enhance their transparency.
Wells Fargo May Be Subject to FINRA Action Over Anti-Money Laundering Allegations
Recently, Wells Fargo Advisors received a Wells Notice warning of possible FINRA action over alleged anti-money laundering policy-related failures. The notice, issued in July, indicated that the SRO intended to recommend disciplinary action for the firm’s purported failure to put into place procedures and policies designed to achieve Bank Secrecy Act compliance. The company is also accused of not putting into place regulations allowing it to identify and report suspect activity.
The probe involves a specific Wells Fargo Advisors branch office. Also, in 2010, Wachovia Corp., which Wells Fargo had acquired, paid $160 million to resolve charges alleging that it had laundered drug money from Mexico.
FINRA Issues Alert Warning Investors About Frontier Markets
This week, the SRO put out an alert encouraging investors and their financial advisors to consider the pluses and minuses of investing in frontier markets, such as Argentina, Lebanon, Slovenia, Vietnam, and Nigeria. According to INRA’s senior vice president for investor education, investors looking to make higher returns in frontier funds should know that greater risks are typically also involved.
“Frontier market” usually refers to nations that are less developed than emerging markets, such as China, Russia, and Brazil. Their regulatory, legal, and financial accounting infrastructures may be weaker, and there also may be political instability. The SRO is recommending that investors know the risks involved in each market, including currency and political risks, watch for changes in index components, take into consideration fees and costs, which tend to be higher with frontier funds than emerging market ones, and look at a fund’s performance history.
Our FINRA arbitration lawyers represent investors in getting their money back. We work with high net worth individuals and institutional clients. Contact The SSEK Partners Group today.
FINRA Issues New Investor Alert, Frontier Funds—Travel With Care, FINRA, September 11, 2014
Wells Fargo facing possible Finra action over anti-money-laundering failures, Wells Fargo, September 8, 2014
FINRA Mulls Revised Broker Bonus Plan, ThinkAdvisor, September 12, 2014
Regulators Weighing New Rules for Private Trading Venues, Wall Street Journal, September 10, 2014
More Blog Posts:
Citigroup Global Markets Fined $1.85M By FINRA, Must Pay $638K Restitution Over Non-Convertible Preferred Securities Transaction Valuations, Stockbroker Fraud Blog, August 27, 2014
Securities Regulations News: SEC Looks to Delay Principal Trading Rules, FINRA Adds More Time to REIT Price Changes and 2nd Circuit Says Dodd-Frank’s Whistleblower Protections Don’t Apply Overseas, Stockbroker Fraud Blog, August 22, 2014
FINRA Claims Wedbush Securities Engaged in Supervisory and Anti-Money Laundering Violations, Institutional Investor Securities Blog, FINRA