The Securities and Exchange Commission proposed yesterday, August 29, 2012, amendments to Rule 506 of Regulation D and Rule 144A under the Securities Act of 1933 as directed by the Jumpstart Our Business Startups Act. The SEC proposed new Rule 506(c) which allows general solicitation and general advertising, provided that all purchasers are accredited investors, …
On July 5, 2012, FINRA published Regulatory Notice 12-34 requesting public comment on the scope of FINRA regulation that would be appropriate for member firms active in crowdfunding offerings. Background The Jumpstart Our Business Startups Act (JOBS Act) contains key provisions relating to securities offered or sold through “crowdfunding.” The crowdfunding provisions of the JOBS Act provide …
On December 21, 2011, the Securities and Exchange Commission, in Securities Act Release No. 9287, amended net worth standard in the definition of “accredited investor” excluding the value of a person’s home from net worth calculations in order to participate in unregistered securities offerings as required by the Dodd-Frank Wall Street Reform Act and Consumer …
Net Worth Standard for Accredited Investors – Securities Act Release No. 9287 Read More »
FINRA recently updated the New Account Application Template to reflect FINRA’s new suitability rule. The template is a voluntary model that was designed for firms to use when creating or modifying their own account applications. Some of the significant features of the template include: Instructions and other information presented in plain-English, Highlights of key disclosures, and Incorporation …
On October 5, 2011, the Second Circuit in Fiero v. Financial Industry Regulatory Authority, Inc. held that FINRA was not authorized under the Securities Exchange Act of 1934 to enforce disciplinary fines through judicial enforcement. Facts Apellants, Fiero Brothers, Inc., was a FINRA member firm and broker-dealer registered with the SEC and John J. Fiero was the …
FINRA Cannot Collect Fines Against Barred Members through Court Read More »
On Friday, August 12, 2011, the Securities and Exchange Commission’s much discussed whistleblower program became effective with the launch of a new webpage for people to report a violation of the federal securities laws and apply for a financial award and the introduction of the new Office of the Whistleblower. To be considered for an award, the final rules …
SEC’s Whistleblower Program is Officially Launched Read More »
On June 2, 2011, the Securities and Exchange Commission’s Office of Investor Education and Advocacy and the Financial Industry Regulatory Authority (FINRA) have issued an investor alert called Structured Notes with Principal Protection: Note the Terms of Your Investment to educate investors about the risks of structured notes with principal protection, and to help them understand …
In this, the second of a two-part series, the focus is on communications with the public.(1) While many of these points below appear more important to managing broker-dealers and product manufacturers (sponsors), retail broker-dealers may value the information in connection with their own materials and review of materials provided by sponsors. Retail firms’ obligations are …
Focus on Sales Literature and Advertising: Tips, Procedures and the BD Use Only Legend Read More »
On May 18, 2011, FINRA issued Regulatory Notice 11-25, which provides further guidance on new consolidated consolidated FINRA rules governing Know Your Customer (Rule 2090) and Suitability (Rule 2111) and extending the implementation date to July 9, 2012 (previously, October 7, 2011). Background FINRA Rule 2090 (Know Your Customer) requires firms to “use reasonable diligence, in regard …
In this, the first of a two-part series, the focus is on communications with the public. While many of these points below appear more important to managing broker-dealers and product manufacturers (sponsors), retail broker-dealers may value the information in connection with their own materials and review of materials provided by sponsors. Retail firms’ obligations are …
