Andrew Wels, Esq. Two-Part Primer On Registered Investment Advisers (RIA)
If you've been a successful broker long enough to remember Bob Dylan then you must have thought about leaving your brokerage firm to start your own firm as a registered investment adviser ("RIA"). But if you haven't done so yet, then get ready to do it now. Historic changes in regulation and technology are converging in a perfect storm that will transform the financial services industry. Over the next few years, every broker will have to consider becoming an RIA.
In this two-part series, I hope to explain the trends that are now forcing this fundamental change, and what you can and should do to protect yourself and your clients. These insights come from more than 30 years of personal experience as regulatory counsel for some of the most innovative firms on Wall Street. READ Parts I and II
Janney Montogmery Scott Loses Promissory Note Arbitration
Ho hum. Did you hear the one about the registered person who failed to repay a balance due on a promissory note from his former employer? Yawn. And he argued that he had been fraudulently induced into the employment and into accepting the loans documented by the notes. Oh, and for good measure, he also said that the former employer firm had breached several agreements. Yadda, yadda, yadda. Like we all don't know how this is going to turn out, right? READ Today's BrokeAndBroker.com Blog considers a recent FINRA regulatory settlement involving texting. At first blush, it all comes off quite badly for the firm and Chief Compliance Officer; however, as you think it over, the violations don't truly rise to a momentous level. Was FINRA too lenient with its sanctions? Was the self-regulatory-organization overstating the facts in order to build a more impressive case? You be the judge. READ
SEC Files Complaints Alleging Pump And Dump Scheme Involving Shell Company
On April 25 and 26, 2016, the Securities and Exchange Commission ("SEC") filed two civil Complaints in the United States District Court for the Southern District of California ("SDCA"). The "Introduction" sections of the Complaints set forth the allegations in such a compelling fashion that there is little point in my attempting to craft a more succinct version and, as such, I commend you to the verbatim extracts in the blog. Links to the full-text complaints provided. READ
In addition to your career as a stockbroker, you decided to start up an outside business. As a registered representative with a FINRA member firm, you understand that prior to embarking upon that so-called outside business activity, you're required to provide your firm with prior written notice, which you did. Good for you! Later on, you decide to seek an investor. Luckily you find someone and the two of you agree to terms. A check is written and cashed. Stock is issued. Ummmm . . . did you forget something? READ