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Government Enforcement and Corporate Compliance


FINRA Enforcement Options

The past five years have seen a precipitous decline in the number of FINRA registered representatives and member firms. Notwithstanding this sharp reduction along with a decrease in the number of investor complaints, disciplinary actions filed and resolved by FINRA are at an all-time high. Indeed, the industry is seeing an increased number of investigations of matters that likely would not have received attention from regulators in the past. Moreover, the disciplinary actions and imposed sanctions reported by FINRA appear to be numerous and significant. Given this environment and in the context of a regulatory investigation, firms often inquire about the distinction between formal and informal actions and seek guidance on the remedies and enforcement options the regulators have available to them. Although a thorough analysis is beyond the reach of any one article, this article provides an overview of the process and available options.

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Preemption Under the Dodd-Frank Act Preemption standards under the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") are among the most controversial aspects of the new law, and there continues to be disagreement as to the proper interpretation. Although the implications of Dodd-Frank are unclear, OCC regulations and subsequent cases provide some guidance, with most decisions supporting the OCC's final rule that Dodd-Frank view more
Legal and Practical Effects of the New FDA Food Safety Modernization Act Food producers, suppliers and consumers have a shared interest in the safety of America's food supply.  As surprising as it may seem, the U.S. Food and Drug Administration (FDA) reports that foodborne illnesses strike 48 million people each year, resulting in 128,000 hospitalizations and 3,000 deaths.  In recent years, the United States has experienced large scale outbreaks of salmonella contamination in eggs and peanut butter, as well as numerous other less publicized food contamination cases.  By some estimates, the peanut butter recall cost peanut producers $1 billion in lost production and sales.  (Peanut Industry: Recall Price Tag $1 billion, http://www.msnbc.msn.com/id/29634279/ns/business-going_green/t/peanut-industry-recall-price-tag-billion.)  Not surprisingly, producers of these contaminated foods have faced numerous consumer lawsuits.  view more
The Consumer Finance Protection Bureau: There’s a New Cop in Town A creation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. Law 111-203 ("Dodd-Frank Act"), the Consumer Financial Protection Bureau ("CFPB") is charged with regulating consumer lending activities of financial institutions and, in partnership with state attorneys general, enforcing numerous federal consumer protection laws.  For commercial litigators involved in the defense of financial institutions in federal and state consumer protection lawsuits and attorney general investigations, the ongoing development and actions of the CFPB are important concerns.  This article discusses the structure and logistics of the CFPB's regulatory and enforcement mechanisms, what the CFPB has been doing since its creation, and what financial institutions and their attorneys can anticipate from the agency moving forward. view more
The Bounty Hunters Are Coming. The Top Five Things You Can Do to Prepare Your Clients for The Dodd-Frank Whistleblower Reform Act Blame Bernie Madoff for what may soon be one of the biggest changes to affect corporate compliance programs in years. Madoff, as you may remember, was accused of stealing almost $65 billion during a Ponzi scheme, which defrauded thousands of investors, pension plans, charities, and retirees. He is currently serving a 150-year sentence in a North Carolina federal prison after pleading guilty to eleven counts of fraud, money laundering, perjury and theft. The Securities and Exchange Commission ("SEC") allegedly ignored numerous reports by whistleblower Harry Markopolos, an independent financial fraud investigator.  view more

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