We were recently reminded of how difficult it is to re-register for a position in the securities industry after being barred.  See https://www.sec.gov/litigation/admin/2021/ia-5682.pdf. On February 9, 2021, the United States Securities and Exchange Commission refused to let a former investment adviser re-register, claiming that the barred adviser had not demonstrated “extraordinary circumstances” to merit re-entry .  In particular, the Commission noted that the barred adviser had not paid his penalty, initially, imposed in 2011.  The…

In what has become a yearly occurrence, FINRA has notified its member firms about its intent regarding the member firms’ compliance programs.  See https://www.finra.org/rules-guidance/guidance/reports/2021-finras-examination-and-risk-monitoring-program. This year, FINRA combined its Report on Examination Findings and Observations (an analysis of prior examination results) and the Risk Monitoring and Examination Program Priorities Letter (planned areas of review) into “FINRA’s Risk Monitoring and Examination Activities Report.”  This new report is 46 pages long, and very dense.  It is meant…

In December  2020, the New York State Attorney General altered its filing rules to align with those required by the SEC’s requirements for a Regulation D Rule 506 offering.  Now, for a Rule 506 offering in New York, the issuer must only file a  copy of the federal Form D with New York’s Investor Protection Bureau instead of the former pre-offer Form 99 within 15 days of the first sale within or from New York.…

In a stark 3-2 vote along political lines, the SEC announced today that it was proposing new rules relating to finders.  Essentially, if the proposed rules are, ultimately, approved, the SEC will sharply change the position it has maintained for over 8 decades, allowing unregistered finders to sell securities to the investing public while receiving transaction based compensation.  See https://www.sec.gov/news/press-release/2020-248.   If approved, the proposed rules would permit 2 categories of finders.  Both types of…

Recently, the Office of Compliance Inspections and Examinations (“OCIE”) released an alert to broker-dealers and registered investment advisers regarding the risks associated with credential stuffing.  See https://www.sec.gov/files/Risk%20Alert%20-%20Credential%20Compromise.pdf. Credential stuffing is an automated attack on web-based user accounts and direct network login account credentials. Cyber attackers obtain lists of usernames, email addresses, and corresponding passwords from the “dark web,” and then use automated scripts to try to compromise user names and passwords on other websites. OCIE…