Important Financial Industry Updates & General Information

FINRA Regulatory Notice 19-10:  FINRA Provides Guidance on Customer Communications Related to Departing Registered Representatives

FINRA has issued an important notification to its members to ensure customers can make a timely and informed choice about who they want as their broker.  This much needed clarification will help departing brokers who have loyal client relationships.  The regulatory notice states that FINRA “expects” the following:

  1. in the event of a registered representative’s departure, the member  firm should promptly and clearly communicate to affected customers how their accounts will continue to be serviced; and

  2. the firm should provide customers with timely and complete answers, if known, when the customer asks questions about a departing registered representative.

FINRA Information Notice (April 29, 2019):  Imposter Websites Victimize the Industry

FINRA issued a warning to the industry that sites have been designed to mimic a firm’s actual website in order to commit financial fraud.  An impostor website mimic’s a firm’s actual website with the goal of obtaining personal confidential information which it then uses to perpetrate financial fraud.  Firm’s are encourage to take precautionary measures such as registering website URL name variations or using website monitoring services to identify imposter websites.

FINRA’s Revamps Its Enforcement Structure

In July 2018, FINRA’s Department of Enforcement underwent a restructuring with the goal of, among other things, improving efficiencies and facilitating more consistent decision-making.  This resulted in the formation of two new centralized groups:  1) the Office of the Counsel to the Head of Enforcement, which centralizes a group of experience attorneys and staff to consult on matters referred to Enforcement; and 2) Investigations, a unit consolidating non-attorney investigators with significant industry experience. 

Enforcement, which has more than 150 attorneys, is organized in the following teams:  1) Main Enforcement, which investigates all types of disciplinary matters; 2) Sales Practice Enforcement, comprised of a specialized group of attorneys that counsels Member Supervision examiners; and 3) Market Regulation Enforcement, comprised of specially trained attorneys who counsel Market Regulation examiners and analysts during trading exams and investigations. 


The SEC Enforcement Manual

The SEC’s Enforcement Manual is a useful resource that provides insight into the investigatory and decision making processes of the staff.  While the manual was designed as a reference for Enforcement staff and was not designed to create any rights on the part of individuals or entities, it provides clarity on the framework in which the staff operates to commence an investigation, the investigation itself and the aftermath.   The manual was last updated in November 2017 and can be found at