Hotline Support


Latest News

July 15, 2019

FINRA Issues New Guidance on Extraordinary Cooperation Credit

On July 11, 2019, FINRA provided long-awaited supplemental guidance on crediting member firms and individuals for extraordinary cooperation in a FINRA investigation – a practice first […]
July 10, 2019

Investment of Public Funds – Pitfalls of Neglecting Periodic Review of Public Money Policies

In the second installment in our series on Investment of Public Funds, we use a specific example to highlight the danger of not reviewing the statutes, […]
July 10, 2019

Expect More Share Class Investigations, Says SEC Enforcement Division

In May 2019, we sent out an Alert warning that the SEC’s Enforcement Division had initiated investigations against firms that did not self-report by the deadline of the […]
July 1, 2019

Bates Group Prepares Investment Adviser Firms for SEC Examinations and Provides Compliance Support

It can be daunting for you and your firm to have to undergo an SEC examination. The reality is that at any given moment the SEC’s […]
July 1, 2019

AML Legislative Update: Seeking Transparency, House and Senate Propose Beneficial Ownership Database

As described in Bates’ last review of congressional initiatives on Anti-Money Laundering / Countering the Financing of Terrorism (AML/CFT), the House Financial Services Committee has adopted an aggressive […]
June 20, 2019

Massachusetts Proposes State Fiduciary Rule; Trade Groups Ask New Jersey to Pause its Process

Last month, Bates described a New Jersey proposal to apply uniform fiduciary standards to broker-dealers and investment advisers for recommendations and advice they may give to New Jersey […]
June 14, 2019

Regulation Best Interest – Is Your Firm Ready?

The SEC voted on June 5th 2019 to approve a set of proposals setting new conduct standards for broker-dealers. Regulation Best Interest (“Reg BI”) is part of a package […]
June 7, 2019

May Alternative Investment Industry Insights

AI Insight recently added Industry Reporting capabilities to help you review alternative investment trends and historical market data for Private Placements, Non-Traded REITs, BDCs, and Closed-End […]
June 6, 2019

Cryptocurrencies Regulatory Update: FinCEN Guidance, SEC and Commissioner Commentary

Last month, Bates described a New Jersey proposal to apply uniform fiduciary standards to broker-dealers and investment advisers for recommendations and advice they may give to New Jersey […]
May 31, 2019

Key Issues Discussed at SIFMA’s C&L Society Regional Seminar in Boston

SIFMA’s Compliance & Legal Society held a regional seminar in Boston on May 21, 2019. The conference hosted four panels comprised of regulators and various attorneys […]
May 31, 2019

Broker-Dealer Branch Office Compliance

May 26, 2019

SEC Office of the Investor Advocate Releases New Report on Efforts to Protect Seniors

An Engagement Adviser[1] in the SEC Office of Investor Advocate (OIA) has prepared a valuable overview report on the SEC’s efforts to protect seniors from financial exploitation. The 25-page […]
May 6, 2019

SEC Enforcement Investigating Firms That Did Not Self-Report

The SEC’s Enforcement Division has now initiated investigations against firms that did not self-report by the deadline of the SEC’s Share Class Selection Disclosure Initiative. (See Bates Alert for background […]
May 5, 2019

NASAA Members Adopt Investment Adviser Information Security Model Rule Package

Only a few weeks ago, Bates described an SEC Office of Compliance Inspections and Examination (OCIE) Risk Alert that highlighted privacy and information security issues raised during examinations of registered […]
May 2, 2019

New Jersey Makes Its Move, Proposes Financial Services Fiduciary Standard

On April 15th, the New Jersey State Bureau of Securities proposed applying uniform fiduciary standards to broker-dealers and investment advisers for recommendations and advice they give to New […]
April 29, 2019

Federal Legislators Target Mandatory Arbitration

Longstanding opposition to mandatory arbitration is finding renewed momentum as federal legislators introduce bills to limit or even eliminate the binding provisions in consumer, employment and […]
April 16, 2019

Changing Firms? Five Issues to Consider

April 16, 2019

FINRA Is Scrutinizing UTMA/UGMA Accounts

In June 2018, Bates Group published an article reporting on deficiencies identified by FINRA in its exam findings which may trigger further scrutiny. In that article […]
March 15, 2019

The Changing Landscape of Non-Compete Agreements in Advisor Recruiting

The Protocol for Broker-Dealer recruiting was adopted in 2004 by Merrill Lynch, UBS PaineWebber and Smith Barney and quickly developed into an almost industry-wide agreement between […]
March 5, 2019

Compliance Technology: The Quest for the Ideal Solution

This is the fourth of our series on Building a Business Case for Compliance Technology for Hearsay Systems. In this article, Mitch Avnet shares the process of building a […]
February 22, 2019

Latest Developments in Variable Annuities and Life Insurance

In our last review of developments concerning variable annuities and life insurance, Bates discussed the SEC’s issuance of a comprehensive new rule proposal intended to create a “layered disclosure approach” […]
February 20, 2019

Investment Advisers 2018 Regulatory Review and 2019 Outlook

With 2018 in the rear-view mirror and 2019 underway, we find ourselves in a position to look back across the regulatory landscape on what transpired over […]
February 15, 2019

The State of Play on Cryptocurrency Regulation

For legislators and regulators, writing rules for crypto-related assets requires balancing the tension between innovation and entrepreneurship, and between sound markets and investor protection. In previous articles, […]
February 15, 2019

New Congress, New Priorities for Financial Services in 2019

The priorities of the congressional committees that oversee financial services are changing. The contours of that change are beginning to take shape as Democrats take control […]
February 15, 2019

Bates Group’s FINRA 529 Share Class Initiative Support for Firms

Last week, Bates sent a time-sensitive Alert concerning FINRA’s new Share Class Initiative. The initiative is similar to the SEC’s Share Class Initiative that focused on mutual funds […]
February 7, 2019

A Continuing Controversy Under Pennsylvania Law: Does the Economic Loss Doctrine Preclude Negligence Claims Against an Insurance Agent or Broker?

By G. Jay Habas, Esquire Insurance errors and omissions claims typically are situations where insurance coverage for a claimed loss is denied or limited and the agent or […]
January 25, 2019

FINRA Highlights Online Platforms, Mark-Up Disclosure & Compliance, RegTech in 2019 Exam Priorities

In his latest annual priorities letter to members, FINRA Chief Executive Officer Robert Cook emphasized that FINRA will be monitoring firm developments “to identify risks and assess their […]
January 25, 2019


Recently, several broker-dealers were served with requests for information from a couple of State Securities Divisions concerning the sale of specific private placements under investigation by […]
January 10, 2019

FINRA 2018 Exam Findings Report and Regulatory Update Reminder

On December 7, 2018, FINRA released their annual Exam Findings Report. This is an important tool for Member Firms to leverage when prioritizing their compliance initiatives […]
January 10, 2019

Defense Verdict for Insurance Agency and Owner in Professional Negligence Case

In Patrick and Robin Coval v. Hrenko Insurance Agency and Jim Burns, we successfully defended an independent insurance agency and its owner against claims of professional […]
December 27, 2018

SEC Office of Compliance Inspections and Examinations Announces 2019 Examination Priorities

SEC Office of Compliance Inspections and Examinations (OCIE) has announced their exam priorities for the upcoming year. You can read the press release here.
December 11, 2018

Does your professional liability policy exclude coverage for claims arising out of multi employer welfare arrangements?

The DOL is proposing to allow advisers to aggregate new and existing clients in the same geographic area into one common 401(k) plan. RIAs and Broker-Dealers, […]
December 6, 2018

Compliance in the Age of Robo Investment Advice

In late August, four registered financial service firms settled SEC charges of misleading retail investors about the efficacy of their quantitative models. The SEC alleged that […]
December 2, 2018

Best Practices When Working with Expert Witnesses

Your relationship with your consulting or testifying expert is a critical component to your case. Mastering best practices when working with an expert will better support […]
November 30, 2018

BCS Alert: FINRA’s Susan Schroeder Previews 2019 Enforcement Priorities

At the November 2018 SIFMA C&L New York Regional Seminar, Susan Schroeder, FINRA’s Executive Vice President and Head of Enforcement, discussed some of FINRA’s enforcement priorities […]
November 5, 2018

Alert: OCIE Recommends IAs Review Compliance Procedures on Cash-Based 3rd-Party Client Solicitation

On October 31st, the SEC Office of Compliance Inspections and Examinations issued a Risk Alert informing investment advisers, investors and other market participants of the most common compliance […]
October 26, 2018

New York DFS Asserts Itself in National Annuities Standards Debate

In a few weeks, a working group of the National Association of Insurance Commissioners (NAIC) will meet again in a continuing effort to complete a revision […]
October 14, 2018

Millennial Marketing—Why It’s Vital and How to Shape It

While millennials in general may not be hot prospects, the young adult children of your clients are another matter. If you want to keep managing that […]
October 12, 2018

FINRA Consolidating Exam and Risk Monitoring Programs

On October 1, FINRA announced that it will consolidate its Examination and Risk Monitoring Programs under a single structure. When completed in 2019, the move will […]
October 8, 2018

NASAA Update: New Leadership, Cybersecurity Model Act for Investment Advisers, and Exam Results on Heightened Supervision for Broker-Dealers

On September 25th, Michael S. Pieciak, Commissioner of the Vermont Department of Financial Regulation (pictured above), took the reins as the 101st president of the North American Securities […]
October 4, 2018

Universal Life Insurance Saga

EDITOR’S OPINION CORNER I am sure that most of you saw the article in the Wall Street Journal, Insurance Policies Backfire on Retirees, which chronicled the […]
September 13, 2018

New Education Requirements on the Horizon for Broker Dealers and (Maybe) Investment Advisers

FINRA is seeking input on proposed changes to the Securities Industry Continuing Education Program (“CE Program”) just as the SEC is considering responses to its request […]
September 12, 2018

Introducing Bates Investor Risk Assessment – Protect Your Firm and Its Most Vulnerable Investors

Bates Group LLC announces the introduction of Bates Investor Risk Assessment (BIRA), a unique breakthrough program to protect broker-dealers and registered investment advisors (RIAs) and their […]
August 17, 2018

Treasury, OCC and FINRA Set the Stage for Fall Fintech Debate

As the summer winds down, regulators are positioning themselves for more oversight of the financial technology (“fintech”) sector. On July 30, the U.S. Treasury Department released […]
August 9, 2018

SEC Regulation Best Interest: Next Round

As the deadline for comments on SEC Regulation Best Interest draws to a close, echoes from the debate on the Department of Labor (“DOL”) fiduciary rule […]
August 2, 2018

Potential Claims Related to LJM Preservation and Growth Fund Collapse

In recent months, Winget Spadafora & Schwartzberg, LLP (“WSS”) has been engaged by numerous insurance E&O carriers, broker-dealers and their registered representatives, and registered investment advisors […]
July 22, 2018

FINRA Dispute Resolution Updates

FINRA recently issued a new fraud warning to member firms, highlighted certain changing rules and procedures for arbitrators, reminded arbitrators to stay current on their disclosures […]
July 16, 2018

Mitigate the Risk: Best Practices for Employee, Client and Third Party Due Diligence in the Financial Services Industry

Hiring the right talent, maintaining accountability for those you hire, and managing through the complex regulatory landscape has never been more important – and more challenging- […]
July 3, 2018

Strategic Plan Unveiled, Town Hall Kick-Off, Supreme Court & ALJs, New Elder Report

Just as the SEC was articulating a long-term agenda before Congress and pursuing a first-of-its-kind proactive investor advisory public outreach, the agency was forced to react […]
June 29, 2018

The NY Department of Financial Services Cybersecurity Regulations: An Update

The New York State Department of Financial Services has promulgated 17 new cybersecurity regulations which apply to regulated entities doing business in New York. The new […]
June 15, 2018

Fraud in the Workplace: New Data Reveals Top Controls to Detect and Prevent Fraud

Last month, the Association of Certified Fraud Examiners (ACFE) issued its 2018 Report to the Nations on Occupational Fraud and Abuse (“Global Fraud Study”). In the Global Fraud Study, the […]
June 7, 2018

Comparing Cyber Insurance policies

Cyber coverage is a growing area of business for the insurance industry.  Originally the market for this coverage was limited to a handful of Lloyd’s syndicates […]
June 7, 2018

FINRA Shares Exam Findings, Deficiencies That May Trigger Further Scrutiny

In our continuing coverage of FINRA’s 2018 Annual Conference, regulators and firm compliance professionals participated in discussions in a session titled “Common Examination Findings and Effective […]
May 24, 2018

FINRA Rolls Out Proposal for High Risk Brokers, Addresses Examination Enhancements

FINRA issued a series of significant proposals over the past few weeks that would 1) reinforce certain firm supervisory obligations concerning associated persons with a history […]
May 4, 2018

FINRA Regulatory Notice 18-13

On April 20, 2018, the Financial Industry Regulatory Authority (“FINRA”) issued Regulatory Notice 18-13, which seeks comments on proposed amendments to the Quantitative Suitability Obligation under […]
May 4, 2018

SEC “Best Interest” Rule Reaction, DOL Rule At Its End

It’s been two weeks since the SEC Best Interest Rule was unveiled, and the three-part proposal is drawing praise, criticism and much scrutiny. As expected, political […]
April 26, 2018

Regulators Offer More Guidance as AML Rules Near Effective Date

Away from the headlines, federal and state regulators continue to prepare financial institutions for their new anti-money laundering compliance obligations. In the past few weeks, the […]
April 23, 2018

Alert Update: SEC Mutual Fund Share Class Disclosures

The SEC Division of Enforcement announced a “Share Class Select Disclosure Initiative” intended to protect and reimburse investors from an adviser’s conflict of interest. The SEC […]
April 20, 2018

Alert: SEC Proposes “Regulation Best Interest”

At an open meeting, the Securities Exchange Commission voted 4-1 to propose a set of rulemakings and interpretations designed to establish clear relationship standards between broker dealers and […]
April 10, 2018

Crypto Currency Consulting

Compliance Risk Concepts (“CRC”) is pleased to announce the expansion of our comprehensive compliance support services into the evolving digital currency space. Call us today to […]
April 5, 2018

Ongoing Cyberthreats Targeting Your Data

Part 1 of 2 – This is the first in a two-part series looking at the current state of cyber protections in light of recent hacks, […]
March 18, 2018


In a pair of rulings issued within a month of each other, the Indiana Court of Appeals has held that the Continuous Representation Doctrine (the “CRD”) […]
March 11, 2018

Alert: New SEC Share Class Selection Disclosure Initiative

Over the past several years, the U.S. Securities and Exchange Commission (“Commission”) filed numerous actions in which an investment adviser failed to make certain required disclosures […]
March 8, 2018

FINRA Tackles Arbitration Procedure Issues

FINRA is stepping up its efforts to address a number of longstanding procedural issues in its arbitration forum. With proposals to (i) increase the likelihood of […]
March 6, 2018

MSRB Mark-Up Disclosure Rules: The Clock is Ticking

In a little more than ten weeks, new rules go into effect that require municipal securities dealers to disclose the mark-ups and mark-downs they charge when […]
February 28, 2018

Fintech Firms Race to Innovate, States and Regulators Voice Concerns

The pace of investment and activity in companies providing a technology-based solution to just about every aspect of the financial services industry soared in 2017. Forbes […]
February 28, 2018

A Peek Behind the Curtain: FINRA Publishes Budget, Financial Guiding Principles, Addresses Fees

FINRA followed up its recently-issued regulatory and examinations priorities letter with the publication of a 2018 annual budget summary containing financial guiding principles. This new disclosure is another first for […]
February 28, 2018

Annual Broker-Dealer Regulatory Review and Outlook

As 2017 ends and 2018 emerges on the regulatory horizon, we find ourselves in a position to look back on what has transpired over the course […]
February 28, 2018

Understanding FinCEN’s Customer Due Diligence (CDD) Final Rule

Compliance Risk Concepts presents Fast Facts: Customer Due Diligence, A Quick Guide To FinCEN’s New Requirements. It offers a snack-size snapshot of key points from our […]
February 5, 2018

Kutak Rock Attorney Wins Summary Judgment Regarding Annuity Distributions

Kutak Rock attorney Gil Boyce won a significant summary judgment for a major financial services client and one of its financial advisers who were accused of […]
January 25, 2018

Anti-Money Laundering Headlines for the New Year

Legislators, regulators and enforcement officials are providing a glimpse of what is likely to be a formidable year in the development of a new anti-money laundering […]
January 25, 2018

Annual Investment Advisor Regulatory Review and Outlook (2017)

As we kick off 2018, it’s important to take a look back across the regulatory landscape on what transpired over the course of 2017 and look […]
January 9, 2018

FINRA Announces 2018 Regulatory and Examination Priorities

FINRA has announced their regulatory and examination priorities for the upcoming year. You can read the letter, with an introduction by CEO Robert Cook, at the […]
January 4, 2018

State News to Watch in 2018

A flurry of year-end announcements reveals a determination by state advocates toward more aggressive state protection of investors and consumers. NASAA published results from a recent […]
November 16, 2017

Bates Alert: FinCEN Customer Due Diligence Rule Implementation Deadline Approaching

Covered financial institutions must assess and enhance their AML programs to be in compliance with the specific requirements of the new Rule by May 11, 2018. Is […]
November 9, 2017

President Signs New Elder Abuse Prevention and Prosecution Law as NASAA Rolls out New Guidance

Political momentum continues to drive lawmakers’ efforts to combat elder financial abuse. In our last report on the subject, Bates considered the current state of play as indicated […]
November 1, 2017

Expert Spotlight: David S. Zweighaft

David Zweighaft (CPA/CFF, CFE) is a Fraud Subject Matter Expert with over twenty-five years’ experience serving the legal and financial services communities as both a consultant and […]
October 12, 2017

NASAA Issues Annual Securities Enforcement Report and Expands Resources for IAs and BDs

In his first address to the North American Securities Administrators Association (NASAA), newly-elected and third-time President Joseph Borg identified key priorities for his upcoming term. He emphasized cooperation between state […]
October 5, 2017

New SEC, State Regulator Initiatives and Filings Amid Cyber Breaches

Testifying at an oversight hearing before the Senate Banking Committee on September 26, 2017, SEC Chairman Jay Clayton addressed concerns over the SEC’s disclosure of a 2016 cyber-security […]
September 28, 2017

Bates Group Introduces Arbitrator Evaluator™ — The Essential Information Source for Arbitrator Selection

Bates Group today introduced Arbitrator Evaluator™ — an essential information source and analytical tool to streamline and enhance the time-consuming process of identifying, ranking, and selecting […]
September 26, 2017

Amendments to Form ADV Part 1A

On October 1, 2017, regulatory changes go into effect for investment advisers. The amended Form ADV will require investment advisers to expand the information they report […]
August 23, 2017

Understanding Insurance Issues In Securities Arbitration and Mediation

Insurance issues often influence the outcome of securities arbitrations and mediations, yet the workings of errors and omissions insurance is not fully understood by many lawyers, […]
July 25, 2017

CCOs in the Cross-Hairs: Recent Developments in the Regulation of Financial Industry Chief Compliance Officers

By Barry R. Temkin and Michelle Atlas* Following the financial crisis of 2008, the role of Chief Compliance Officer for financial institutions has been redefined, most […]