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On December 31, 2024, the Financial Industry Regulatory Authority, Inc. (“FINRA”) issued Regulatory Notice 24-18 (“RN 24-18”) to provide updated guidance to members regarding Rules 15c3-1, 15c3-3 and 17a-5 under the Securities Exchange Act of 1934 (“SEA”), Rule 204 under Regulation SHO, FINRA Rules 4210, 4230(b), 4521 and 4524, and Regulation T of the Federal…

On December 20, 2024, FINRA requested public comment on its proposed rule changes to Rules 5110 (Underwriting Terms and Arrangements), 5121 (Public Offerings of Securities With Conflicts of Interest) and 5123 (Private Placements of Securities).  These proposed rule changes stem from comments received from the public in response to the May 2023 Regulatory Notice 23-09…

Broker-dealers had been preparing for the sunset of the prior time-based relief that the staff of the Securities and Exchange Commission provided in respect of compliance with Rule 15c2-11 as to certain fixed income securities, which expires on January 4, 2025.  The SEC had separately provided exemptive relief with respect to Rule 144A securities; however…

The Cyber and Analytics Unit within the Member Supervision program of the Financial Industry Regulatory Authority, Inc. (“FINRA”) recently published a cybersecurity advisory regarding increasing cybersecurity risks at third-party providers (the “Cybersecurity Advisory”). The Cybersecurity Advisory highlights third-party risks to FINRA member firms and effective practices to mitigate such risks.  

FINRA’s advisory comes at a…

On August 14, 2024, FINRA published an update (the “Update”) on its ongoing efforts to engage with its members related to crypto asset activities. The Update describes “crypto assets” as assets that are issued or transferred using distributed ledger or blockchain technology. They include, but are not limited to, so-called virtual currencies, coins, and tokens.

On July 31, 2024, the Securities and Exchange Commission (“SEC”) announced that it agreed to settle allegations that a California-based broker-dealer sold in excess of $13 million in “L bonds,” a speculative, unrated debt security, to retail customers with lower risk profiles.  The settlement of this case is notable because it was the SEC’s first…

On June 27, 2024, the Financial Industry Regulatory Authority, Inc. (“FINRA”) issued Regulatory Notice 24-09 (the “Notice”) reminding member firms that FINRA’s rules and the securities laws apply to the use of artificial intelligence (“AI”), including large language models and other generative AI (“Gen AI”) technology, just as they apply when member firms use any…

Several days ago, FINRA released guidance updating its Frequently Asked Questions relating to Rule 2210 on Advertising and Public Communications to address Artificial Intelligence.  This follows after FINRA has consistently been noting that the use of AI and AI tools should be addressed by member firms in their policies and procedures and may implicate their…