Recent SEC and SRO Enforcement Developments and Cases Regarding Broker-Dealers

Fall 2011

This Outline highlights key recent U.S. Securities and Exchange Commission (the "SEC" or the "Commission") and Financial Industry Regulatory Authority ("FINRA") enforcement developments and cases regarding broker-dealers.


There have been a number of important enforcement developments this year at the Commission, including the SEC's first ever deferred prosecution agreement, the finalization of the Dodd-Frank whistleblower rules, and the continued focus on individual liability in enforcement actions. Moreover, a federal judge has raised substantial concerns about the SEC's practice of allowing defendants to neither admit nor deny the allegations in a settlement. For his part, the Director of the Division of Enforcement has harshly criticized certain defense counsel tactics and raised questions about multiple representations in investigations. All the while, the Commission continues to be active and aggressive in bringing enforcement actions.

These developments and cases are described in more detail on pages 2 through 50 of this Outline.


FINRA's enforcement program has a new leader, new rules, revised Sanction Guidelines and a new disciplinary action database. FINRA also appears to be ahead of last year in bringing cases with large fines. It has brought cases in several traditional areas, but also opened new fronts in other investigations.

These developments and cases are described in more detail on pages 51 through 85 of this Outline.

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