B/D RIAs have come under fresh scrutiny post Madoff. FINRA, the Financial Industry Regulatory Authority, emailed a number of broker/dealers "in recent days," says a spokesperson, with requests for information about their RIA units. Responses were due by close of business today.

According to an alert from Sidley Austin LLP, FINRA requested information that would help the regulator assess the investment advisory and hedge fund business being conducted at or alongside the b/d. A FINRA spokesperson could not disclose the number of firms contacted, or provide details about the kind of information requested.

"They are reacting to either what happened to Madoff or requests from the Hill or the SEC," says Brian Rubin, a partner of law firm Sutherland, and former deputy chief counsel with the NASD's enforcement department. "With regards to Madoff, FINRA took the position that it did not have the jurisdiction over any investment advisory activity—and that's technically correct—but there are instances when FINRA does request information regarding outside business activities such as RIAs or insurance activities."

The current round of information requests could uncover problems if it turns out a b/d hadn't previously disclosed to FINRA that it runs an RIA, says Rubin. FINRA may also want to make sure b/ds are complying with Rule 2110, which requires members to conduct business in accordance with just and equitable principles of trade, he says. FINRA can "basically apply the rule to anything they want. So if they see activity they're not comfortable with—even if there is no specific rule on the issue—they can apply [Rule 2110]," says Rubin.