Policy Patty Toolkit 

Making the world a little more compliant one toolkit at a time.


FINRA Reminds Firms of Exercise Cut-Off Time for Options Expiring on the Friday After Thanksgiving

Posted on November 22, 2018 at 12:05 AM
The national options exchanges are closing at 1:00 p.m. Eastern Time (ET) on Friday, November 23, 2018 (the Friday after Thanksgiving), which will modify the exercise cut-off time for expiring options. FINRA reminds firms that pursuant to FINRA Rule 2360(b)(23)(A)(viii), if a national options exchange or The Options Clearing Corporation announces a modified time for the close of trading in standardized equity options, then the deadline for an option holder to make a final decision to exercise or... Read Full Post »

FINRA Proposes Rule Change Relating to Corporate Financing Rule (FINRA Rule 5110)

Posted on November 1, 2018 at 9:10 AM

FINRA filed ith the SEC a proposed rule change to amend FINRA Rule 5110 (Corporate Financing Rule – Underwriting Terms and Arrangements) (the “Rule") to make substantive, organizational and terminology changes to the Rule. The proposed rule change is intended to modernize Rule 5110 and to simplify and clarify its provisions while maintaining important protections for market participants, including issuers and investors participating in offerings

In sum, the proposed rul...

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SEC Charges Moody's With Internal Controls Failures and Ratings Symbols Deficiencies

Posted on August 29, 2018 at 9:20 AM

The SEC announced that Moody’s Investors Service Inc., one of the nation’s largest credit ratings agencies, has agreed to pay a total of $16.25 million in penalties to settle charges involving internal control failures and failing to clearly define and consistently apply credit rating symbols. This marks the first time the SEC has filed an enforcement action involving rating symbol deficiencies.

Moody’s agreed to pay $15 million to settle charges of internal controls f...

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Transamerica Entities to Pay $97 Million to Investors Relating to Errors in Quantitative Investment Models

Posted on August 28, 2018 at 8:25 AM

The SEC announced charges against four Transamerica entities for misconduct involving faulty investment models and ordered the entities to refund $97 million to misled retail investors.

According to the SEC’s order:

  • Investors put billions of dollars into mutual funds and strategies using the faulty models developed by investment adviser AEGON USA Investment Management LLC (AUIM). 
  • AUIM, its affiliated investment advisers Transamerica Asset Management Inc. (...
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Deutsche Bank to Pay Nearly $75 Million for Improper Handling of ADRs

Posted on July 22, 2018 at 1:15 PM

The SEC announced that two U.S.-based subsidiaries of Deutsche Bank AG will pay nearly $75 million to settle charges of improper handling of “pre-released” American Depositary Receipts (ADRs).

The case stems from a continuing SEC investigation into abuses involving pre-released ADRs. In proceedings against Deutsche Bank Trust Co. Americas (DBTCA), a depositary bank, and Deutsche Bank Securities Inc. (DBSI), a registered broker-dealer, the SEC found:

  • Their miscond...
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FINRA Proposes Rule Change to Amend the Security Futures Risk Disclosure Statement

Posted on June 9, 2018 at 9:10 AM

FINRA is filing with the SEC a proposed rule change to update the 2002 security futures risk disclosure statement (“2002 Statement” or “Statement”). The proposed changes would incorporate prior supplements pertaining to Sections 5.2 (Settlement by Physical Delivery) and 8.1 (Corporate Events), make a technical change to Section 5.2 to reflect that the normal clearance and settlement cycle for securities transactions is now two business days, amend Section 6.1 (Protecti...

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FINRA Fines Wedbush Securities Inc. $1.5 Million for Customer Protection, Net Capital Rule Violations and Related Failures

Posted on February 6, 2018 at 9:50 AM

FINRA fined Wedbush Securities Inc. $1.5 million for violating the SEC’s (SEC) Customer Protection and Net Capital Rules, and for related supervisory and books and records failures. FINRA found that:

• Wedbush was net capital deficient, ranging between $10.5 million and $59.4 million.

o Note: The deficiencies resulted from Wedbush’s failure to take required deductions when valuing certain certificates of deposit for purposes of computing its net capital.


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FINRA Announces Updates of the Interpretations of Financial and Operational Rules

Posted on January 10, 2018 at 7:35 PM

FINRA updated its interpretations in the Interpretations of Financial and Operational Rules per the advice of SEC staff. The updated interpretations relate to amendments that the SEC adopted to Securities Exchange Act (SEA) Rule 15c6-1 about the standard settlement cycle.

These updates follow the March 2017 changes adopted by the SEC regarding SEA Rule 15c6-1 regarding the standard settlement cycle. FINRA is updating interpretations in the Interpretations of Financial and Operational Ru...

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