FINRA Unscripted

FINRA's Examination team carries out a core function of FINRA's business by examining every member firm at least every four years and as often as annually, depending on the risk profile of each individual firm. These exams ensure firms remain in compliance with FINRA rules and federal securities laws and regulations and are at the heart of FINRA's mission of investor protection and market integrity. 

On this episode, Michael Solomon, Senior Vice President of Examinations, Nicole McCafferty, Vice President of the Retail Exam Firm Group, and Joe Sheirer, Vice President of the Office of Exams, join us for a deep dive into how the program works and what firms can expect during routine firm exams.

Resources mentioned in this episode:

Episode 127: FINRA’s Risk Monitoring Program

Episode 60: National Cause and Financial Crimes Detection Programs

Reg Notice 23-08: Selling Private Placements

2023 Report on FINRA’s Examination and Risk Monitoring Program

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Each year, FINRA hosts its Annual Conference in Washington, D.C. It is an event packed full of panels with information on all the latest compliance trends and emerging regulatory issues, with a number of networking opportunities spread across the three-day event. On this episode, we're taking you behind the scenes of this year's Annual Conference to listen in on a conversation between FINRA President and CEO Robert Cook and the Chair of the FINRA Board of Governors, Eric Noll.

Resources mentioned in this episode:

2023 FINRA Annual Conference

2024 FINRA Annual Conference Registration

FINRA Board of Governors

Eric Noll Biography

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Litigation economics is not something they teach in most schools, but when it comes to unique or first of their kind enforcement matters, it's an important skill to have, whether it be in establishing sampling methodologies, the creation of a benchmark or development of restitution frameworks. 

On this episode, we hear from Chris Kelly, acting Head of Enforcement, and Lori Walsh, Vice President of the Office of the Chief Economist, about how FINRA's Enforcement team has been partnering up with the Office of Regulatory Economics and Market Analysis to ensure better case outcomes.

Resources mentioned in this episode:

Episode 124: Introducing REMA

Episode 77: How an Enforcement Action Becomes an Enforcement Action

Office of the Chief Economist

FINRA Enforcement

Monthly Disciplinary Actions

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In recent months, FINRA has published two Regulatory Notices regarding the fraudulent transfer of customer accounts using an automated system called ACATS. On this episode, we'll hear all about what goes into the creation of a Reg Notice and take a deep dive on this particular issue. Plus, we'll hear about some information that didn't make it into the most recently published Notice.

FINRA Unscripted welcomes three new guests, Chris Hunter, Principal Analyst with Risk Monitoring, Emily Kahn, Principal Intelligence Specialist with the Financial Intelligence Unit, and Lindsey Barnett, Senior Principal Investigator with the Special Investigations Unit, to talk about Regulatory Notices 23-06 and 22-21.

Resources mentioned in this episode:

Reg Notice 23-06: FINRA Shares Effective Practices to Address Risks of Fraudulent Transfers

Reg Notice 22-21: FINRA Alerts Firms to Recent Trend in Fraudulent Transfers of Accounts

Reg Notice 21-18: Practices Used to Protect Customers From Online Account Takeover Attempts

Reg Notice 20:32: FINRA Reminds Firms to Be Aware of Fraudulent Options Trading

Rule 11870: Customer Account Transfer Contracts

BSA E-filing System

Episode 127: FINRA’s Risk Monitoring Team

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In March, FINRA hosted the Senior Investor Protection Conference, a one-day event dedicated to sharing the most up-to-date regulatory information, effective strategies and solutions for protecting senior and other vulnerable investors from exploitation. 

On this episode, we're taking an abridged look at one of the conference sessions on the various trends, scams and schemes currently impacting investors. Brooks Brown, Senior Director of FINRA's High-Risk Representative Unit, moderates the conversation with Amy Nofziger, Director of Victim Support for the AARP’s Fraud Watch Network, Mayur Patel, Senior Principal Intelligence Specialist with FINRA's Financial Intelligence Unit, and Elizabeth Yoka, a Manager with FINRA's Vulnerable Adults and Seniors team.

Resources mentioned in this episode:

FTC Romance Scam Data

AARP Helpline Info

AARP Fraud Watch Network

The Perfect Scam AARP Podcast

FINRA Key Topic Page: Senior Investors

Reg Notice 22-25: Heightened Threat of Fraud in Small Cap IPOs

Reg Notice 22-05: Amendments to FINRA Rule 2165

NASAA Senior Website

FINRA Conferences & Events

FINRA Securities Helpline for Seniors

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FINRA's Risk Monitoring team is responsible for assessing financial, operational and business conduct risks that exist within individual member firms and across the industry. But they're also the day-to-day point of contact for firms for any questions they may have for FINRA. 

On today's episode, we're talking to Ornella Bergeron, Senior Vice President of Member Supervision's Risk Monitoring team, Brian Kowalski, Vice President of Diversified and Carrying & Clearing with the Risk Monitoring team, and Andrew McElduff, Vice President of Retail with Risk Monitoring learn more about the team’s mandate and work and why they’re such a resource for the member firms they work with.

Resources mentioned in this episode:

Reg Notice 22-25: FINRA Alerts Firms to Recent Trend in Small-Cap IPOs

Reg Notice 22-29: FINRA Alerts Firms to Increased Ransomware Risks

15a-6 Chaperone Firms (from 2021 Exam and Risk Monitoring Report)

Episode 90: Single Points of Accountability

FINRA Gateway

FINRA Examination and Risk Monitoring Programs

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This episode originally aired in November 2022.

The market for crypto assets has seen continued growth and firms are looking for ways to get involved in the digital asset space. So far, about two dozen firms have been approved by FINRA to provide services in securities backed by digital assets. And more firms are looking to follow in their footsteps. 

On this episode, we hear from Armando Valdes, an application manager with FINRA’s Membership Application Program (MAP), and David Aman, a senior advisor with the Office of Financial and Operational Risk Policy within the Chief Legal Office, about the role FINRA’s MAP team is playing in the digital asset space, some common sticking points in these new and continuing member applications and how FINRA is working to support innovation while protecting investors in this dynamic environment. 

Resources mentioned on this episode: 

SEC’s September 25, 2020 No-Action Letter, “ATS Role in the Settlement of Digital Asset Security Trades”

SEC/FINRA July 8, 2019 Joint Statement on Broker-Dealer Custody of Digital Asset Securities

SEC Statement on the Custody of Digital Asset Securities by Special Purpose Broker-Dealers

Have questions? Email: [email protected]

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In 2020, a surge of new investors entered U.S. securities markets for the very first time, and the FINRA Foundation and its research partners at NORC at the University of Chicago jumped into action to get to know just exactly who these investors were. Two years later, they followed up to see where those investors are now. 

On today's episode, we're talking to Dr. Olivia Valdes, Associate Research Principal Analyst with the FINRA Investor Education Foundation and Dr. Angela Fontes, a freelance researcher and founder of Fontes Research, about the results of the latest study to shed light on some of the most interesting findings and to pinpoint areas of opportunities for regulators, investor educators and firms alike.

Resources mentioned in this episode:

2023 New Investor Report

Investing 2020: New Accounts and the People Who Opened Them

FINRA Foundation Homepage

NORC Homepage

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FINRA recently announced the creation of a new team, the Office of Regulatory Economics and Market Analysis, which brings together FINRA's Office of the Chief Economist and the Office of Financial Innovation. 

On this episode, we talk with Jonathan Sokobin, Executive Vice President and head of REMA, Haime Workie, Vice President of the Office of Financial Innovation, and Lori Walsh, Vice President of the Office of the Chief Economist about how the new team works to inform FINRA's regulatory policies and programs to advance its mission of investor protection and market integrity.

Resources mentioned in this episode:

2022 Industry Snapshot

Office of the Chief Economist

REMA Announcement

Episode 16: How FINRA Rules Get Made and Reviewed

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FINRA's new Machine-Readable Rulebook is designed to enhance firms' compliance efforts, reduce costs and aid in risk management, with a lot to gain for firms of all sizes and various business models. 

On this episode, Afshin Atabaki, Associate General Counsel with FINRA's Office of General Counsel, and Haime Workie, Vice President of FINRA's Office of Financial Innovation, join us to delve into what exactly the Machine-Readable Rulebook is, how it works, and how you can start taking advantage of all it has to offer.

Resources mentioned in this episode:

Special Notice 10/21/22: FINRA Requests Comment on Its Machine-Readable Rulebook Initiative

Special Notice 7/30/18: FINRA Requests Comment on Financial Technology Innovation in the Broker-Dealer Industry

FINRA API Developer Center

FINRA Rules

FINRA Rulebook Search Tool™ (FIRST™) Overview

FINRA Rulebook

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