FINRA staff discussed examples of registered representatives’ misconduct in settled or litigated cases, as featured in the October issue of FINRA's Quarterly Disciplinary Review. See below for descriptions of some cases. FINRA's National Adjudicatory Council ("NAC") suspended and fined a registered representative who failed to investigate a customer's trading instructions, which violated the FINRA ethical standards rule; FINRA suspended a registered representative who failed to disclose his association with two businesses to his firm and who acted improperly while administering a state

The Enforcement Division of FINRA brought three claims against Charles Schwab alleging that the firm's arbitration language in its form agreements was in violation of the FINRA rules. The language at issue concerned class actions. The Hearing Panel ruled for Schwab on two of the three claims, but for the Enforcement Division on the third. The Hearing Panel ordered Schwab to take a number of remedial measures and also fined the firm. Lofchie Comment: Is it appropriate to fine a firm in a case such as this? A straightforward reading of the case suggests that Schwab attempted to ensure that its

At this meeting, representatives of the Full Physical Segregation Working Group discussed with the CFTC Staff full (i) physical segregation, (ii) amendments to the bankruptcy code, and (iii) custodial arrangements. The Full Physical Segregation Working Group includes the following members: Investment Company Institute, Investment Advisers Association, Tudor Investment Corporation, Delta Strategy Group, GM Asset Management, Managed Funds Association, AQR Capital Management, LLC, Tudor Investment Corporation, State Street Global Advisors, Alternative Investment Management Association

The CFTC filed an enforcement action charging the New York Mercantile Exchange, Inc. ("CME NYMEX"), and two former CME NYMEX employees, with violating the Commodity Exchange Act and CFTC Rules through the repeated disclosures of material nonpublic customer information to an unauthorized outside commodity broker. According to the complaint, the nonpublic customer information which was unlawfully disclosed included details of "recently executed trades, the identities of the parties to specific trades, the brokers involved in trades, the number of contracts traded, the prices paid, the structure

The Treasury Department published a FAQ on its website providing some background on, and plans with respect to, the use of a Legal Entity Identifier ("LEI") system for identifying parties to financial transactions. While the use of LEIs has been most visible with respect to swap data reporting (where the CFTC is currently using an interim CICI system), the Treasury FAQ is a reminder of the government's intent to push, through work with various multinational groups, for the use of LEIs more broadly. The Treasury FAQ indicates that it intends to have an LEI system launched by next month. Click