What is a FINRA arbitration? The Financial Industry Regulatory Authority ("FINRA") issued a Regulatory Notice in July reminding member firms that customers have a right to request arbitration "at any time." In addition, the self regulator stated that customers do not forfeit their right to a FINRA arbitration by signing an agreement that calls for another venue. The notice also reiterated that FINRA members cannot require registered representatives and certain employees to

In the commercial world, parties to a transaction often allocate the risk of economic loss in the event the transaction is not fully executed by including a sole remedy clause in their agreement. New York courts have long upheld such contractual provisions. However, as the First Department of the New York Supreme Court, Appellate Division, recently held, there are exceptions. One such exception pertains to a party’s grossly negligent conduct. As explained in Morgan Stanley M

Did Tesla violate securities laws by not disclosing a fatal accident? In May, the driver of a Tesla Model S was killed after colliding with a truck while the Autopilot feature, which is designed to assist drivers in steering, braking and avoiding collisions, was engaged. Since October 2014, Tesla Motor Co. has installed autopilot software in all of its cars, even though the feature is still being tested in a public beta. Now, the Securities and Exchange Commission ("SEC") i

What are the elements of a sound business succession plan? In June, the Securities and Exchange Commission (“SEC”) proposed a rule that would require registered investment advisors to adopt formal business continuity and transition plans in the event of business disruptions whether from natural disasters, cyber attacks or the death of key people, particularly the firm's owner. The succession plans should enable a firm to continue meeting its fiduciary obligations to clients

This blog will address many aspects of arbitration, including the pros and cons of this alternative dispute resolution mechanism. This installment will look at the difficulties the losing party has challenging the arbitral award. Arbitration is a voluntary form of dispute resolution. It is less formal than a court and conducted by an impartial person or persons selected by the parties. Unless the parties agree to the contrary, the arbitrator is not bound to follow the law.

What are the ramifications of the new fiduciary rule? Earlier this year, the Department of Labor unveiled a new fiduciary standard regulation that will require financial advisors who provide investment recommendations for retirement accounts to meet a fiduciary standard by putting clients’ interests before their own (discussed here ). The Obama administration claims the new standard will protect retirement investors and save them $17 billion in advisory fees. Now, a consort

What are the consequences of submitting inaccurate trade data to the SEC and FINRA? Investment banks and securities firms are well aware of their responsibilities to adhere to the rules promulgated by the Securities Exchange Commission ("SEC") and the Financial Industry Regulatory Authority ("FINRA") regarding trade data, also referred to as "blue sheets." The federal securities laws and FINRA rules require firms to provide blue sheet information to FINRA and other regulators

How do anti-money laundering programs detect suspicious activity? The Financial Industry Regulatory Authority ("FINRA") announced in May that it fined two Raymond James entities for systemic flaws in their anti-money laundering programs. The units, Raymond James & Associates (RJA) and Raymond James Financial Service ("RJFS") were fined $8 million and $9 million, respectively. FINRA cited these units for not establishing and implementing adequate procedures over the course of

What does the Labor Department fiduciary standard mean for financial advisors? After telegraphing its punch for almost 6 years, the Department of Labor recently announced the highly anticipated fiduciary standard regulation that will require financial advisors who provide investment recommendations for retirement accounts, such as 401(k)s and IRAs, to meet a fiduciary standard. These advisors are now required to put their clients’ interests before their own, rather than adh