Regulation and Compliance issues for Wealth Professionals can be challenging to navigate especially when the SEC is involved. Catch the latest news and analysis on compliance updates that impact financial advisors.
The New York State Department of Financial Services alleges Robinhood lacked sufficient staff and resources to ensure compliance with the Bank Secrecy Act and anti-money-laundering rules.
The SEC's settlement with Aegis Capital Corporation included a $2.3 million civil penalty; Commissioner Hester Peirce said the deal may lead to firms not giving clients the investment option at all even when it would be useful for them.
Advisors with histories of serious misconduct who exit the brokerage industry often continue to provide advice under state insurance regulations and are likely to reoffend in the future, according to a recent Stanford Law study.
One securities attorney said the $2 million in fines was minimal considering the size of the firms, an indication that the SEC wants the industry to take the issue seriously.
In separate lawsuits, J.P. Morgan Securities sought temporary restraining orders to stop several advisors who they claimed illegally solicited former clients after moving to new roles.
The firm recommended investments in share class options for clients in its wrap account programs when more affordable options were available, according to the commission.
The state’s Securities Division released its “Ongoing Financial Planning Guide” earlier this year to address what it said were the compliance questions raised by the increased popularity of the subscription model compared to AUM-based fees.