Securities Law Blog

FINRA recently announced that it has created a Panel to screen enforcement cases before they are filed, called the Disciplinary Advisory Committee (“DAC”). According to a report in the Wall Street Journal, Jim Shorris, executive director of FINRA enforcement, said “It gives the staff an opportunity to hear about significant cases”. Once an enforcement team finishes an investigation, it presents the case to a committee of around a dozen senior managers, according the WSJ report. The committee can then suggest amending the charges, allow the case to proceed, or send it back for more “legwork”, among other things. The Office of Disciplinary Affairs provides another level of review by vetting settlement agreements before they are finalized. According to the report, the DAC came to FINRA from NYSE regulation via FINRA enforcement chief Susan Merrill.

The North American Securities Administrators Association said recently that it has 11 legislative priorities for 2008, and the most important one is that it preserves the authority of state securities regulators. In a statement, NASAA said that its agenda supports the group’s efforts to “advance investor protection and promote an efficient and effective regulatory environment necessary to maintain investor confidence in the capital markets”. Besides protecting regulators from conflicts (and some would say encroachment) from federal regulation, NASAA said its priorities also include s trengt hening the arbitration process for investors and enhancing corporate accountability standards

For more information on this subject contact securities attorneys, Michaels, Ward & Rabinovitz, LLP.

FINRA recently announced that Banc One Securities Corp. agreed to be fined $225,000 to resolve charges that it made unsuitable sales of deferred variable annuities to nearly two dozen clients, many over 70 years old. In a press release, FINRA said that BOSC also agreed to allow the 23 customers who purchased the deferred variable annuities to sell them without penalty. Normally, the Vas would be subject to a six year surrender period. The firm also agreed to reimburse surrender fees to clients who had already sold their Vas and paid those fees. BOSC merged with J.P> Morgan Securities in 2006. In settling, neither firm admitted nor denied the allegations. This case is further proof that, despite all the foc us on CDOs and other subprime woes—variable annuity sales remain a target for regulators.

For more information on this subject contact securities attorneys, Michaels, Ward & Rabinovitz, LLP.