Category Archives : FINRA


DSA’s Securities Employment Dispute Stats Cited by Bloomberg

A story by Neil Weinberg in Bloomberg relied on Dynamic Securities Analytics (‘DSA’) analysis of Finra employment arbitration results.   DSA found that arbitrators sided with brokers in the majority of cases, finding that the employment termination U5 forms contained false, inaccurate and/or defamatory information. However, even when arbitrators found the information defamatory, they rarely more »


The Potential for Bias against Women in FINRA’s High Risk Rep Algorithm

The move toward data analytics applied to broker supervision might seem on face value to result in objective identification of “high risk” financial advisers. However, once the technical jargon is stripped away, algorithms are just opinions embedded in mathematics. Algorithms are created by humans and can reinforce human prejudices.  Researchers have noted that big data used in algorithms more »


The Links between FINRA’s High Risk Rep Program and Expungement

Finra released a video interview on 1/10/18 with Mike Rufino,  Executive Vice President and Head of FINRA Member Regulation—Sales Practice, about FINRA’s High-Risk Registered Representative Program. Mr. Rufino discussed some of the criteria and the methodology FINRA uses to identify and monitor High Risk Registered Representatives. He listed the following criteria as inputs into the High more »


2017 Securities Regulator AML Exam Priorities vs. SAR-SF Filings

Dynamic Securities Analytics, Inc. (“DSA”) reviewed the SEC’s and FINRA‘s 2017 exam priorities letters to identify AML areas of focus. There are a few areas where the two regulators’ priorities overlap: suspicious activity monitoring, cyber security and elder financial exploitation. The focus on elder abuse is a new area for the SEC this year whereas more »


SEC vs. FINRA: 2016 AML Priorities

FINRA and the SEC recently released their respective 2016 exam & regulatory priorities. DSA reviewed the priorities for topics that directly or indirectly touch on AML issues. While there is overlap in the areas of cybersecurity, market manipulation and microcap securities, the two regulators diverge on other AML priorities. DSA prepared the comparison below:   more »


Federal Marijuana Banking Bill Leaves Key Issues Unresolved

The Marijuana Businesses Access to Banking Act of 2015 bill’s stated purpose is: to create protections for depository institutions that provide financial services to marijuana-related businesses, and for other purposes.  A press release by one of the co-sponsors, Senator Jeff Merkley (D-OR), points out the following: “Forcing businessmen and businesswomen who are operating legally under Oregon state law more »


How were 2014 FINRA Disputes Resolved? Analysis of Dispute Resolution Statistics

  Dynamic Securities Analytics, Inc. analyzed the numbers provided by FINRA Dispute Resolution covering all 2014 closed cases and found: 2,447 closed Customer cases, representing 64% of all closed cases 7% of Customer cases were closed via arbitration with damages awarded to the Customer   Non-Customer Cases 1,391 Non-Customer cases (ex. Employee vs. Firm, Firm more »


Which Broker/Dealers get Sued by Reps Most Often?

FINRA arbitration isn’t just for customer disputes. As DSA found, over half of FINRA arbitrations are non-customer related. A large portion of the non-customer disputes occur when Associated Persons sue their current or former broker/dealer employer. Allegations in Associated Person vs Member Firm cases often include: defamation, reformation of U-5, wrongful termination and compensation disputes. more »


1Q14 FINRA Disciplinary Actions: Law Firm Representation Stats

Dynamic Securities Analytics, Inc. (DSA) analyzed 1Q14 FINRA Disciplinary Actions Letters of Acceptance, Waiver & Consent (AWC) to determine legal representation trends. There were 164 AWCs during the first quarter of 2014. DSA broke down the analysis between disciplinary actions that named a firm versus those that named an individual. Broker/Dealers 67 AWCs named a Broker/Dealer more »


Analysis of 2013 FINRA Dispute Resolution Statistics

DSA analyzed how cases were closed through the FINRA dispute resolution process in 2013. Customer Cases FINRA reported that in 2013 there were 499 Customer Complaint cases decided by Arbitration (paper & hearing) and in 212 of these cases, the customer was awarded damages. Based on the statistics provided by FINRA, DSA determined: 2,772 Customer more »


Potential Impact of Florida Supreme Court Ruling

DSA analyzed the potential impact of the recent Florida Supreme Court ruling that Florida’s statute of limitations can apply to securities arbitration cases between investors and their brokers. Key Findings: 1 in 5 Customer v. Member Firm arbitrations occur in Florida Time limits may preclude ’08 – ’09 market losses from damage calculations The opinion more »