I recently represented a broker-dealer in connection with a FINRA enforcement action involving deficiencies in the firm’s supervisory processes for monitoring outside securities transactions executed by its associated persons.
From FINRA Examination to Enforcement
The firm had fallen behind in reviewing securities transactions occurring in its associated persons’ disclosed outside brokerage accounts, as required under FINRA Rule 3110(d)(1)(C). During a routine cycle examination, FINRA examiners identified the issue and referred the matter to FINRA Enforcement. While the firm’s compliance officer was comfortable working with the examination staff, he recognized that the transition from an examination to an enforcement proceeding presented a different set of challenges and engaged me to help guide the firm through the process.
Respond, Resolve, Recover
I assisted the firm at every stage of the enforcement matter. This included preparing responses to FINRA’s requests for information under FINRA Rule 8210, negotiating the language of the Acceptance, Waiver, and Consent (AWC), resolving the matter on favorable terms, and successfully reducing the fine initially proposed by FINRA. I also worked with the firm to prepare the written certification required by the AWC, confirming that the identified supervisory deficiencies had been fully remediated.
Why Experienced FINRA Outside Counsel Matters
The true value of experienced outside counsel is not simply reflected in the outcome of an enforcement matter, but in the strategic guidance provided throughout the process. From the initial regulatory inquiry through final resolution and remediation, knowledgeable counsel can anticipate issues, negotiate effectively, protect the firm’s interests, and minimize unnecessary expense and disruption. When facing FINRA Enforcement, having an attorney who understands the process can make a meaningful difference in both the efficiency of resolving the matter and the quality of the result.
About Michael Greene
Michael Greene is a Practus Partner with more than 35 years of experience in financial services regulation, particularly in broker-dealer compliance and enforcement matters. His career includes roles with FINRA, the SEC, Nasdaq, and private practice, giving him practical insight into regulatory examinations, enforcement proceedings, supervisory obligations, sales practice issues, and broker-dealer operations. He advises financial services firms on SEC and FINRA rules, including matters involving supervision, Regulation Best Interest, suitability, advertising, order handling, trade reporting and customer protection requirements.
