Resources/ Updates - February 2014

The SDDco Client Update

The SDDco Client Update is an action oriented email prepared in-house, tailored to client needs, and sent as an adjunct to our online newsletter.  Verified newsletter subscribers receive our Client Update once each month.

The SDDco Client Update is intended to provide general information only. It is not intended as, and should not be taken as, financial, tax, accounting, legal, consulting or any other type of advice specific to you or your firm. Users of the SDDco Client Update should not act or refrain from acting on the basis of information provided on the sddco.com website. Always check with your accountant and/or attorney.

Feb28

FINRA Enforcement ~ 2013 Dollars & Sense

FINRA fines dipped in 2013, while the number of cases stayed just about flat. Last year, FINRA assessed fines that amounted to $57 million—a 27 percent drop from the $78 million levied in 2012.  The quantity of cases, however, barely budged: 1,541 in 2012; 1,535 in 2013. Last week, a statistical analysis of FINRA disciplinary actions filed against broker-dealers in 2013, was released by D.C. law firm, Sutherland,

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Feb27

Dirty Dozen Tax Scams for 2014

The Dirty Dozen—compiled by the Internal Revenue Service (IRS) each year— lists the common scams taxpayers can encounter at any time, but more so during the filing season. 1. Identity Theft Tax fraud through identity theft tops the dirty chart.  Someone uses your name, SSN or other personal identifying information to commit fraud. In many cases,

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Feb27

Focus on Broker Cyber-Security

In keeping with its focus on cyber-security as an exam priority, FINRA has notified members that it has begun targeted assessments of how broker-dealers manage actual or potential cyber-security threats. Threats to IT systems keep mounting.  They harken from new sources and pose risks to investors, firms, and the entire financial system.  As such, FINRA continues to

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Feb24

Advisers in Never-Examined Land

If you have never been examined by the SEC…but have been registered as an investment adviser for a couple of years…you could be hearing from OCIE–the Office of Compliance Inspections and Examinations.  A  new “Never-Before Examined Initiative” will focus on never reviewed advisers, particularly those registered three years or more. This initiative was mentioned briefly in the OCIE National Exam Program Priorities for 2014.  But the

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Feb24

On Erasing Complaints Against Brokers

In recent months, the process whereby brokers may bargain to remove a customer complaint from public record as a term of a settlement has been under fire.  Accordingly, last week, the FINRA Board of Governors approved a rule proposal to curtail expungement of public customer complaints under certain conditions. The FINRA proposal seeks to prohibit firms

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Feb22

More Judicial Info on BrokerCheck

FINRA Rule 8312 controls what FINRA discloses via the FINRA BrokerCheck system to help investors make more informed decisions.  BrokerCheck provides info on an industry person’s professional history and  business practices, and the conduct of FINRA member firms and their associated persons. Such info is compiled from the Central Registration Depository (CRD) and the securities industry

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Feb19

ACA Employer “Play or Pay” Delayed Another Year

Mandates on Obamacare for mid- and large- sized firms were eased once again. The Treasury Department fact sheet called ‘Final Regulations Implementing Employer Shared Responsibility under the Affordable Care Act (ACA) for 2015” outlines new and decelerated requirements. Employer shared responsibility or the “play or pay” provision still requires employers with 50 or more fulltime employees to

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Feb12

The M&A Brokers Relieved of Registration

On February 4, 2014, the Division of Trading and Markets of the SEC (the “Division”) issued a No-Action Letter (NAL) providing relief from the registration requirements of the Securities Exchange Act of 1934 (Exchange Act) for brokers engaging in certain merger and acquisition transactions between buyers and sellers of private companies. The NAL replied to a

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Feb12

Should CPOs & CTAs Have a Capital Requirement?

In response to disciplinary actions for improper use of customer funds by Commodity Pool Operators (CPOs) and Commodity Trading Advisers (CTAs), the National Futures Association (NFA) released a Request for Comment.  Notice I-14-03 poses the notion of a capital requirement for these commodity firms.   Comments are due April 15th. Under the current structure, CPO and CTA members

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Feb11

Fresh Guidance on Bad Actor Disqualifications

Rule 506 of Regulation D of US securities law—a widely used exemption—allow firms, under certain conditions, to issue and offer securities directly to the public without registering securities with the SEC. Per the Dodd-Frank Act, the SEC issued, in July of 2013, disqualifications from this exemption (as 506(d)) pertaining to an issuer (its directors, officers,

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Feb05

SEC 2014 Exam Priorities: the Overview

The US Securities and Exchange Commission (“SEC”) released its 2014 examination priorities to raise investor and firm awareness of heightened risk areas.  The priorities identified by the National Examination Program (“NEP”) cover topics relevant to broker-dealers, investment advisers, investment companies, clearing agencies, exchanges and other financial organizations. Market-Wide Matters  The release acknowledged matters that are

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Feb05

SEC 2014 Exam Priorities: Investment Advisers

The US Securities and Exchange Commission (“SEC”) released its 2014 examination priorities to raise investor and registered firm awareness of heightened risk areas.  The priorities identified by the National Examination Program (“NEP”) cover topics relevant to broker-dealers, investment advisers, investment companies, clearing agencies, exchanges and other financial organizations. The NEP release targeted focus areas spanning

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Feb05

SEC 2014 Exam Priorities: Broker-Dealers

The National Examination Program (“NEP”) of the Securities and Exchange Commission (“SEC”) released its 2014 examination priorities to raise awareness of heightened risk areas. The SEC uses its NEP Broker-Dealer Program (“BD Program” to manage the examinations for approximately 4,500 registered broker-dealers.  The BD Program worked in conjunction with FINRA, the self-regulatory watchdog, to create

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Feb05

Reasonable Accommodations for Pregnant Employees in NYC

Per an amended New York City Human Rights law, signed by Mayor Bloomberg in October, New York City (NYC) employers with four or more in staff, as of January 30, 2014, must provide a reasonable accommodation to pregnant employees and those who suffer medical conditions related to pregnancy and childbirth, unless proven to cause undue hardship

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