Chief Legal Architect and a co-founder of Caffrey.AI
Steven Lofchie is the Chief Legal Architect and a co-founder of Caffrey.AI, an AI platform built for law firms, banks, and the financial regulatory industry. He is also a partner at Norton Rose Fulbright, where he advises financial institutions on securities laws, the Commodity Exchange Act, and broker-dealer regulation. Ranked by Chambers USA every year since 2007, he is the author of “Lofchie’s Guide to Broker-Dealer Regulation,” long considered the leading treatise on the subject.
Recent Articles & Comments
Given the legal uncertainty of the FINRA Rule (it is not clear how it can override either SEC requirements or state law requirements), the SEC should also issue at least a no-action letter or, better, still, a formal exemption from SEC rules regarding customer funds that would expressly permit broker-dealers to put a hold on customer funds where abuse is suspected.
Form PF . Having more firms complete the form is just putting private industry effort to waste.
For broker-dealers, the issue this enforcement action raises is whether there is more that they should do to watch for employer misconduct or educate their own customers against salesperson misconduct. For example, should broker-dealers periodically send their customers a notice akin to the SEC's investor alert warning against making payments other than directly to the broker-dealer itself?
Letter 14-126 should be revised to drop the common control requirement. The CFTC has from this requirement, and it does not seem to serve a material purpose.