Search the News Archive

Text of FINRA Regulatory Notice 13-45: Rollovers to Individual Retirement Accounts (PDF)

"FINRA is issuing this Notice to remind firms of their responsibilities when (1) recommending a rollover or transfer of assets in an employer-sponsored retirement plan to an Individual Retirement Account (IRA) or (2) marketing IRAs and associated services. Reviewing firm practices in this area will be an examination priority for FINRA in 2014.... A broker-dealer's recommendation that an investor roll over retirement plan assets to an IRA typically involves securities recommendations subject to FINRA rules. A firm's marketing of its IRA services also is subject to FINRA rules. Any recommendation to sell, purchase or hold securities must be suitable for the customer and the information that investors receive must be fair, balanced and not misleading. This Notice provides guidance on these activities and is intended to help firms ensure that they have policies and procedures in place that are reasonably designed to achieve compliance with FINRA rules."

Text of FINRA 2015 Regulatory and Examination Priorities Letter (PDF)

17 pages. "[C]hallenges in five areas contribute to firms and registered representatives at times compromising the quality of service they provide to customers as well as contribute to compliance and supervisory breakdowns ... [1] Irrespective of whether a firm must meet a suitability or fiduciary standard, FINRA believes that firms best serve their customers -- and reduce their regulatory risk -- by putting customers' interests first.... [2] Firms must protect their culture against individual bad actors, as well as firm-wide behaviors that can gradually erode that culture.... [3] A firm's systems of supervision, risk management and controls are essential safeguards ... [4] [T]he sales of novel products and services remain a regulatory flashpoint ... [5] FINRA underscores the importance of firms moving to identify and mitigate conflicts of interest."

Text of FINRA Regulatory Notice 17-27: Guidance to Members Affected by Hurricane Harvey (PDF)

"This Notice provides guidance to firms with a home office, branch office or other business location affected by Hurricane Harvey. FINRA is providing guidance on a number of regulatory and compliance issues, including emergency office relocations, continuing education requirements for registered personnel, registered personnel engaged in active military duty, regulatory filings and associated fees, regulatory inquiries and customer communications."

Text of FINRA Regulatory Notice 16-12: Pension Income Stream Products (PDF)

"Pension income stream products typically involve an up-front lump sum payment to a pensioner in exchange for the rights to the pensioner's future pension income payments. This Notice discusses the characteristics of and investor protection issues presented by pension income stream products, as well as the legal status of these products. In addition, this Notice addresses the responsibilities of firms in supervising the sale of pension income stream products."

Text of FINRA Regulatory Notice 13-23: Disclosure of Fees in Communications Concerning Retail Brokerage Accounts and Individual Retirement Accounts (PDF)

"FINRA has observed overly broad language in sales material of broker-dealer firms that implies there are no fees charged to investors who have accounts with the firms. In other instances, specific fees that are not charged are highlighted and separated from disclosure regarding other fees that may be charged.... [C]laims regarding fees must be accompanied by clear disclosure of the types of fees that may be charged.... A headline statement to the effect that a firm does not charge annual maintenance fees should include an explanation in close proximity to the headline of the conditions associated with the offer and the other fees that would apply. For example, communications could discuss the lack of an annual account maintenance fee as follows: ..."

FINRA Orders Wells Fargo, Raymond James, and LPL Financial to Pay More Than $30 Million in Restitution to Retirement Accounts and Charities Overcharged for Mutual Funds

"Many mutual funds waive their upfront sales charges on Class A shares for certain types of retirement accounts, and some waive these charges for charities. Mutual funds available on the retail platforms of Wells Fargo, Raymond James, and LPL offered these waivers to charitable and retirement plan accounts under limited circumstances and disclosed them in their prospectuses. However, at various times since at least July 2009, Wells Fargo, Raymond James and LPL did not waive the sales charges for affected customers when they offered Class A shares. As a result, more than 50,000 eligible retirement accounts and charitable organizations at these firms either paid sales charges when purchasing Class A shares, or purchased other share classes that unnecessarily subjected them to higher ongoing fees and expenses."

Mid-Year Review: FINRA's Sanctions in 2012 on Pace to Far Surpass 2011's Totals

"Financial Industry Regulatory Authority (FINRA) fines and disciplinary actions for 2012 are on track to significantly outpace those for 2011 ... [D]uring the first half of 2012, FINRA ordered broker-dealers and associated persons to pay $39.4 million in fines. 'If fines continue to be assessed at this rate, 2012 will represent a 15% increase from the total fines reported by FINRA in 2011,' said [the author]. 'Essentially, we are looking at a jump from $68 million in 2011 to projected fines of $78.4 million in 2012.'"

Text of FINRA Report on Conflicts of Interest for Broker-Dealers (PDF)

44 pages. Excerpt: "[This] report identifies effective practices that FINRA observed at firms or that, based on experience and analysis, FINRA believes could help firms improve their conflicts management practices. It also contains more general observations and commentary on firms' practices that we share for the industry's information. FINRA recognizes that the effective practices and observations in this report are drawn from discussions with large firms and, as a result, will not in all cases be directly applicable to small firms. This report is a point-in-time review of several facets of conflicts of interest."

Burlington, Vermont, Files FINRA Complaint against Morgan Stanley

Excerpt: The city of Burlington, Vermont, has filed a regulatory complaint against Morgan Stanley alleging that the firm's consultants sold the city pension fund investments that caused it to lose $21 million.... The city made public its complaint with the Financial Industry Regulatory Authority (FINRA) after getting City Council approval to file the FINRA action.

Disciplinary and Other FINRA Actions Reported for June 2013 (PDF)

56 pages. Excerpt: "FINRA has taken disciplinary actions against the following firms and individuals for violations of FINRA rules; federal securities laws, rules and regulations; and the rules of the Municipal Securities Rulemaking Board (MSRB)."