The Office of Compliance Inspections and Examinations (“OCIE”) conducts the SEC’s National Exam Program with a mission to protect investors by improving compliance, preventing fraud, monitoring risk and informing policy. The results of OCIE’s examination are used by the SEC to inform rule-making initiatives, identify and monitor risks, improve industry practices and pursue misconduct.

Beginning May 6, 2019, the SEC will permit an amendment to FINRA Rule 4512 allowing authorized individuals to use electronic signatures for discretionary accounts held at member firms. Presently, Firms are required to maintain manually executed signatures for all individuals authorized to exercise discretion in applicable accounts.

The following disciplinary actions were taken against both firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules: Firms Fined: Advisory Group Equity Services Ltd. The Firm was fined $20,000 for failing to create and implement proper written supervisory procedures (“WSPs”) in regard to email review of newly hired Registered Representatives (“RRs”).

The following disciplinary action was taken against both Wedbush Securities, Inc and one of its registered representatives, (“RR”) due to violations of Section 17(a)(1) and (3) of the Securities Act, Sections 9(a)(2) and 10(b) of the Exchange Act and Rule 10b-5(a) and (c) thereunder. Firms Fined. Wedbush Securities, INC. The Firm was fined $250,000 for failing to reasonably supervise one of its RR, Timary Delorme.

The following disciplinary actions were taken against both firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules: Firms Fined: Cetera Advisor Networks LLC. The Firm was fined $700,000 and ordered to pay $691,755.27 in restitution to customers for failing to identify red flags of unsuitable mutual fund switching and unsuitable stock trading that ensued to conceal the switching by a Registered Representative (“RR”) of the Firm.

The following disciplinary actions were taken against both firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules. Firms Fined. Third500, LLC fka Healthios Capital Markets, LLC. The Firm was fined $50,000 for allowing four employees to engage in investment banking transactions without the applicable Series 79 Investment Banking registration.

The Office of Compliance Inspections and Examinations (OCIE) of the U.S. Securities and Exchange Commission (SEC) released its 2019 examination priorities. The protection of retail investors, including seniors and those saving for retirement, remain a priority.

The Office of Compliance Inspections and Examinations (OCIE) of the U.S. Securities and Exchange Commission (SEC) released its 2019 examination priorities. The protection of retail investors, including seniors and those saving for retirement, remain a priority.

On Friday December 14, 2018, the Securities and Exchange Commission (“SEC”) published a Risk Alert advising Registered Investment Advisers (“RIAs”) of their obligation to revise written policies and procedures related to electronic messaging utilized by their personnel as a recent examination conducted by the Office of Compliance Inspections and Examinations (“OCIE”) identified shortfalls.

The following disciplinary actions were taken against both firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules. Firms Fined: Lincoln Investment Planning, LLC. The Firm was fined $35,000 for failing to implement adequate surveillance procedures to effectively monitor registered representative’s rate of variable annuity exchanges.

The following disciplinary actions were taken against both firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules. Firms Fined: Seven Points Capital, LLC (New York, New York). The Firm was fined $40,000 for failing to implement an adequate AML program.

The following disciplinary actions were taken against both firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules. Firms Fined: Cetera Financial Specialist LLC. The Firm was fined $200,000 for failing to implement a supervisory system and establish WSPs that adequately enforced OBA guidelines to evaluate the outside business activities of representatives to see if activities interfered with responsibilities owed to the Firm and customers.

The Securities and Exchange Commission (“SEC”) settled charges against Voya Financial Advisors Inc. (VFA”), a dual FINRA member broker-dealer and SEC registered investment adviser for its failure in adopting written policies and procedures designed to protect customer information and protect customers from the risk of identity theft.

Earlier today FINRA issued Regulatory Notice 18-31 to provide member firms with information relative to the recent guidance issued by staff of the SEC’s Division of Trading and Markets with respect to the use of third-party record keeping services to preserve records pursuant to SEA Section 17(a) and SEA Rule 171-4.

As of October 1st, 2018, all Firms must have a designated Principal Financial Officer (“PFO”) and a designated Principal Operations Officer (“POO”). All designees must have the S27 (“Financial and Operations Principal” or “FINOP”) registration to act as a PFO or a POO. This new rule also includes Firms currently exempt from the requirement of having a FINOP or an Introducing Broker-Dealer Financial and Operations Principal.

The following disciplinary actions were taken against both firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules. Firms Fined: EFG Capital International Corp. (Miami, Florida). The firm was fined $800,000 and ordered to implement supervisory systems and procedures pursuant to FINRA Rule 3110.

Examination Restructuring: Effective October 1, 2018, the SEC is restructuring the representative-level qualification examinations by creating a general knowledge examination called the Securities Industry Essentials (“SIE”) and transforming the representative-level examinations into specialized knowledge exams.

The following disciplinary actions were taken against both firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules. Firms Fined: The firm Lombard Securities Incorporated in Baltimore Maryland was fined $10,000 for executing municipal securities transactions without having the adequate Municipal Securities Principal registered with the firm.

On Friday July 6, 2018 FINRA published Regulatory Notice 18-20 with respect to its efforts to ascertain the extent in which its members or its associated persons, or affiliates currently engages or intends to engage, in any activities related to digital assets such as cryptocurrencies, virtual coins and tokens.

At the 2018 FINRA Conference this past May, panelists introduced a new version of Web CRD that is going to be unveiled in the coming months. This updated version of the CRD portal provides user friendly tools to make navigating CRD more efficient for both compliance firms and representatives alike.