2017 Regulatory and Examination Priorities Letter-Part 3
This is the third in a series of posts to discuss FINRA’s 2017 Regulatory and Examinations Priorities Letter. FINRA’s 2017 letter provides information about areas FINRA plans to review in 2017 based on observations from its regulatory programs as well as input from various stakeholders, including member firms, other regulators and investor advocates.
To begin, protecting senior investors will remain a top priority in 2017. FINRA will assess the supervisory mechanisms used by different firms to detect and prevent problematic sales practices. The supervisory mechanisms implemented by firms are important because they can help protect senior investors from fraud, abuse and improper advice.
In addition, FINRA has noticed an increased use of aggressive boiler room tactics used by brokers to sell microcap (or “penny”) stocks. FINRA will focus its attention on detecting the sale of penny stocks, which can be particularly vulnerable to market manipulation given the lack of verifiable financial information on newly public and thinly capitalized companies.
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