ARE YOU LOOKING FOR A ST. LOUIS BASED SECURITIES FRAUD LAW FIRM?

If you are, look no further.  Indeed, if you use Google for your law firm search you will probably find about 10 law firms that actually have little or nothing to do with St. Louis.  Are you getting the best firm for your needs, or the firm that paid to play on the internet?

Cosgrove Simpson began representing investors and members of the industry in 2006.  Some cases have gone to court, while others have gone to an arbitration forum such as FINRA, JAMS, or AAA.  If you are seeking experienced counsel regarding claims of fraud or negligence related to an investment, please call and ask for one of our St. Louis attorneys. 314-563-2490

SENIOR FINRA OFFICIALS SHARE INSIGHTS AT ST. LOUIS MEETING

The new director of FINRA District #4 (Iowa, Kansas, Missouri, Minnesota, Nebraska, South Dakota, and North Dakota) along with the Deputy Regional Chief Counsel shared excellent insights today on FINRA's priorities and concerns in both the exam and enforcement arenas. Speaking to a small group of attorneys and industry members, District Director Scott DeArmey stated that the best word to describe FINRA is “change.”

According to Mr. DeArmey, the current priorities for FINRA's examiners include:

• Short sales and Reg. SHO

• Fraud detection

• High frequency trading

• Municipal securities

• Private security transactions

• Hiring and compensation practices.

Mr. DeArmey stressed that FINRA's examiners were applying a more stringent risk-based focus in order to respond more effectively with limited resources¹.

Beyond FINRA industry exam issues, Mr. DeArmey announced and described FINRA's new office of Fraud Detection and Market Intelligence (OFDMI) and its whistle blower hotline. Finally, he noted that the FINRA rulebook consolidation process was “85% complete.”

Mr. DeArmey was followed to the podium by Deputy Regional Chief Counsel Jeff Ziesman. Mr. Ziesman gave a refreshingly candid review of issues with which FINRA enforcement is currently grappling. Beyond the noteworthy (and unproductive) conduct engaged in by enforcement targets from time to time, Mr. Ziesman gave a detailed explanation of the inner-mechanics of the enforcement process as well as the standards for awarding subject cooperation. Finally, Mr. Ziesman provided specific examples of prior cases in which members and their representatives were sanctioned for violating Rule 2010 as a result of their conduct during arbitration proceedings and settlements.

The Bar Association of Metropolitan St. Louis (BAMSL) hosted the event, and the chicken and green beans were superb.

1There are four types of FINRA exams: cycle examinations, cause examinations, trading and marketing surveillance examinations, and sweeps.

FINRA Reprimands St. Louis Brokerage Firm for Poor Oversight

This month, the Financial Industry Regulatory Authority (FINRA) reprimanded First Clearing, LLC, a St. Louis-based brokerage firm, for insufficient anti-money laundering (AML) protections in FINRA Case #2008012791101.

First Clearing consented to the described sanctions, without admitting or denying the findings, submitting the firm to $400,000 in fines. The AML inadequacies focused on the firm’s practice of only reviewing transactions regarding a limited amount of potentially suspicious activity. FINRA findings stated that “the firm generated many exception reports and alerts dealing with potentially suspicious securities transactions and money movements in customer accounts that were introduced by unaffiliated broker-dealers to the firm.” However, a majority of these exception reports were not reviewed. As a result, FINRA concluded that First Clearing did not have an adequate program for detecting, reviewing, and reporting suspicious activities as required by the Suspicious Activities Report (SAR) reporting provisions of 31 U.S.C. 5318(g) and NASD Rule 3011(a).

Previously in March 2009, FINRA levied fines against First Clearing for the firm’s failure to provide the required notifications to customers over a five-year period ending in 2008.