Rogge Dunn, a partner at financial advisor law firm Rogge Dunn Group, was quoted in an article by D Magazine. The article covers the recent crackdown by the FINRA on rogue financial advisors, brokers, and Registered Representatives (RR).
The FINRA rule states that those subject to the obligations “present heightened risk of harm to investors and their activities may undermine confidence in the securities markets as a whole.” In addition, the rule will “further promote investor protection and market integrity.” At the same time, it will also give FINRA additional tools to incentivize regulatory compliance.
FINRA’s New Exam
Recently, FINRA established a new exam identifying high-risk brokers and RRs. The new exam unit is based in New York City. It will identify and monitor 100 to 200 financial advisors and RRs deemed possibly dangerous to investors. Although FINRA will concentrate primarily on repeat offenders, they stated that they are not relying on one single definition of a high risk RR. Therefore, every RR should take vigilant steps to ensure compliance.
A Compliance-Focused Approach
Financial advisor law firm attorney Rogge Dunn says RRs should prepare for an increase in FINRA examinations and investigations. While FINRA has announced new crackdowns many times in the past, they historically do not bring about any noticeable change in FINRA’s enforcement efforts. However, this time, Dunn’s impression is different. FINRA is devoting more resources and energy into identifying and taking action against high-risk RRs.
RRs and brokers should take a compliance-focused approach and contact a financial advisor law firm that understands the compliance rules.
“While it remains to be seen just how aggressive FINRA will be, my impression from RRs and firms who have been investigated is that this time FINRA is devoting more resources and energy into disciplining high-risk RRs. Therefore, every RR needs to be prepared,” said Dunn.
You can read the full article here.