Compliance

While the financial services community waits for some movement from the SEC on new rules and policies governing advisors, the Labor Department has taken it upon itself to get the ball rolling in the name of better protecting investors and pensioners.

The Financial Industry Regulatory Authority has fined Dallas-based financial services company Southwest Securities Inc. $500,000 for soliciting violations related to its municipal securities business.

The 27-page term sheet handed to the five largest mortgage servicers last week is a detailed, dense list of requirements that, if implemented as proposed, would fundamentally change the relationship between servicers, investors and borrowers.

Between the SEC's broad and unspecific recommendations to safeguard shareholders from unscrupulous advisors and the Department of Labor's recent attempts to redefine the conditions under which a financial advisor becomes a fiduciary, the financial advisors and broker-dealers providing the guidance and products investors need for retirement are huddling up to decide which regulations and rule changes they should support in the face of looming legislation.

The fine, related to the sale of municipal securities, will require the firm to ensure it is complying with Municipal Securities Rulemaking Board rules.

As they say: The more things change, the more they stay the same. That goes for the American Bankers Association Wealth Management Conference in Miami.

Trust, but verify.

SunGard has launched a Wealth Management Regulatory and Risk Consulting Practice, part of its Wealth Management Global Services.

Federal agencies are set to establish sweeping new servicing standards not by legislation or regulatory process, but by a major action against the top five mortgage servicers.

Criminal charges were filed Thursday against a former financial adviser at UBS Financial Services who the Securities and Exchange Commission charged with siphoning $3.3 million from investors to pay for luxury cars, prostitutes and gambling debts.

Four more members of Congress have sent letters to the SEC expressing concerns or raising questions about provisions in its proposed muni advisor registration rules that would treat state and local appointed board members as muni advisers who would be subject to registration and regulation.

The more you hear about the SEC examination process, the more you realize that the examiners can't quickly recognize the honest advisors from the crooks, and are generally more interested in finding fault with the honest advisors than identifying the crooks.

Criminal charges were filed Thursday against a former financial advisor at UBS Financial Services whom the Securities and Exchange Commission charged with siphoning $3.3 million from investors to pay for luxury cars, prostitutes and gambling debts.

The Securities and Exchange Commission charged a hedge fund manager with diverting investment proceeds of over $12 million into other funds, which he then used to fund a real estate venture and a San Francisco record company.

The Securities and Exchange Commission on Wednesday unanimously agreed to propose amendments to its Rule 2a-7 that would remove all credit rating references from the rule, which requires money market funds to invest in high-quality and very liquid short-term securities.

Even if the Dodd-Frank financial reform law is implemented flawlessly, two men in a position to know say it won't be enough to stop another financial crisis.

Despite controversy over a proposal to reign in the bonuses of Wall Street executives, the Securities and Exchange Commission voted 3-2 to issue for comment a plan to reduce incentives and prohibit institutions from maintaining compensation arrangements that encourage “inappropriate risks.”

Financial services firms are being specifically targeted in Web attacks by "criminal elements," according to Edward Powers, a principal at Deloitte & Touche. Those attackers “know what assets they’re going after and they’re going after you in a very orchestrated way,’’ he said at a meeting of the Wall Street Technology Association.

Anyone looking for the Treasury Secretary to endorse a specific approach to the future of the GSEs was surely disappointed by his testimony Tuesday, yet much could still be gleaned.

When the call comes from compliance that your branch examination is imminent, some advisors decide it’s time to take a vacation while others take the vapors. But branch exams should not be stressful or painful – if you follow these basic steps and integrate them into your practice.