Financial Regulatory Forum

IMPACT ANALYSIS: FINRA’s charges against ex-Morgan Stanley traders hired by UBS raise background questions

September 27, 2016

By Julie DiMauro, Regulatory Intelligence

(Thomson Reuters Regulatory Intelligence) – The Financial Industry Regulatory Authority’s (FINRA) charges against John Batista Bocchino and his sales assistant, Rafael Barela Jacinto, over unauthorized trading of $190 million worth of Venezuelan bonds and falsifying records have cast light on the significance of disciplinary histories in employing brokers.

Wells Fargo case highlights need to monitor employees with stressful performance goals

September 22, 2016
One of the more difficult tasks for compliance officers is to question employee success, even if those achievements come against almost insurmountable odds. The disclosure that Wells Fargo employees, in order to meet sales targets, signed up more than 2 million of its customers for new accounts and credit cards without their knowledge, is an example of employee performance that should be questioned even though the impulse is often to look the other way.

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SEC scrutinizing more sellers of F-Squared portfolios based on bad performance

August 31, 2016

By Richard Satran, Regulatory Intelligence

(Thomson Reuters Regulatory Intelligence) – After charging 13 firms for using discredited marketing claims from the now-defunct investment adviser F-Squared, the Securities and Exchange Commission said it is looking more broadly at other companies that used a portfolio strategy for exchange-traded funds (ETFs) whose claims of market-beating results were based on false data.

Whistleblowing practices and severance agreements — what works

August 30, 2016

By Julie DiMauro, Regulatory Intelligence

(Thomson Reuters Regulatory Intelligence) – Through their enforcement actions, policy initiatives and press releases, United States regulators are showing what effective whistleblowing practices look like, and why their importance is growing.

Behavioral compliance: how to stop ‘good people’ from doing bad things

August 16, 2016

(Thomson Reuters Regulatory Intelligence) – Behavioral compliance is a relatively new way of thinking in combating bad behavior on Wall Street and beyond. Born out of frustration with repeated cases of misconduct and individual wrongdoing, both banks and regulators are looking outside their traditional toolkit in trying to curb unethical behavior. The effort is part of the ongoing cultural reform battle, and evidence of creative ways of leveraging other disciplines to tackle the problem is growing, say experts. (more…)

Is FINRA doing enough to steer investors clear of bad brokers?

August 9, 2016

By Todd Ehret, Regulatory Intelligence

(Thomson Reuters Regulatory Intelligence) – A recent debate has emerged as to whether U.S. regulators and the securities industry have done enough to rid themselves of bad brokers. At the core of the argument are recent studies showing that the percentage of those engaged in misconduct is much higher than that claimed by the Financial Industry Regulatory Authority, and that such brokers are often able to move unimpeded from firm to firm. (more…)

Ontario whistleblower policy seen strong on compliance culture, weaker on incentives, confidentiality

July 19, 2016

Ontario’s incoming securities whistleblower program will promote better compliance culture among market participants, but the limited incentives and confidentiality it offers to informants may hamper its effectiveness, legal experts have warned. (more…)

IMPACT ANALYSIS: DOL fiduciary rule may require multiple paths to compliance

June 27, 2016

Manisha Kimmel, Thomson Reuters

(NEW YORK) – What makes the U.S. Department of Labor’s (DOL) “fiduciary rule” so transformational is that unlike most regulations which have a major cost and operational impact, the DOL rule package will also have a material impact on the front office. This impact will include financial adviser compensation and revenue associated with Individual Retirement Accounts (IRAs) and other retirement accounts. (more…)

The clash of varying views of ‘culture’ among companies and financial regulators

June 14, 2016

By Todd Ehret, Regulatory Intelligence

(Thomson Reuters Regulatory Intelligence) – Culture, values, ethics, principles, and beliefs are all somewhat synonymous. Or are they? It depends on the setting and more importantly, the viewpoint from which one attempts to assess the philosophical concepts of right and wrong.

U.S. banks, regulators see progress, but not yet victory, in culture battle

May 17, 2016

The struggle to instill stronger cultural values and ethics into U.S. banking organizations has shown signs of progress over the recent past, but maintaining momentum requires business leaders to remain committed to the process, according to senior bankers and regulators. Moreover, it remains to be seen whether the reforms banks have put in place prevent any future scandals from emerging. (more…)