Violations that Often Drew FINRA’s Attention

Being in quarantine doesn’t mean  violations will decelerate because FINRA Attorneys are consistent in their unsuitable recommendations reviews. Even though this is becoming a hot topic for FINRA and all the cases they are handling consistently, an alarming rate of violations do happen. Main points to consider here are:

1: Evaluate your WSPs for suitability and always make sure that they are doing over just repeating the language from Rule 2111. They must know the way a supervisor is checking a specific trade for suitability and make it as a suggestion, same goes with how they analyze a trade compare to previous trades, to appear for patterns.

2:  Having in-depth WSPs is definitely important, but you can also have periodic training sessions and giving alerts and compliance bulletins for you policies to own back ups. Proper supervision consists of written rules and policies and proper implementation of these rules and policies by those that are trained and eligible.

3:  Even though you are using the offers of your clearing firm doesn’t mean you are already safe.  FINRA attorneys still prefer you to check if there is an electronic surveillance system to you in order for you to know whether it’s doing the job preferably.

4: Senior investors receive a good amount of attention and are also important to FINRA. If you are having senior investors that are engage in an investment strategy other than buying and holding blue chip stocks, make sure that you are ready to answer questions about how you are allowing that to happen.

5: As a firm, taking time in educating yourself on the actions FINRA is taking with other firms is also important so that you can have an understanding on what FINRA attorneys are focusing.

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