SEC Issues Risk Alert to Broker-Dealers Regarding Examination Criteria

Posted on June 10th, 2024 at 1:27 PM
SEC Issues Risk Alert to Broker-Dealers Regarding Examination Criteria

From the desk of Jim Eccleston at Eccleston Law

The Securities and Exchange Commission (SEC) has issued a new Risk Alert, advising broker-dealers that their prior disciplinary history, financial stress indicators, and media reports could make them likely candidates for an examination.

ThinkAdvisor reports that the alert aims to help broker-dealers prepare for possible exams by outlining the criteria the SEC’s Examination Division may use to select firms for review and the focus areas for these exams. The alert also lists the types of information and documents that exam staff may initially request during a broker-dealer examination, including a Sample Initial Information Request List.

According to ThinkAdvisor, the SEC exam staff may consider several factors. Those include prior exam history, tips, complaints, referrals involving the firm, the length of time since the last exam, and the firm's customer base, products, and services. Specific offices or branches of a broker-dealer may also be targeted based on identified risk factors, such as customer complaints or outside business activities of personnel. 

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, sec

Return to Archive

TESTIMONIALS

Previous
Next

As a financial advisor with over 20 years of experience, I feel fortunate to call Jim my attorney and friend. He is a fantastic lawyer and trusted advisor. He is skilled in the matters necessary to do the job well. He uses his thoughtful approach and calm demeanor to achieve a positive outcome for the client. If you want to feel confident that nothing will be missed and that you will be represented in a highly professional manner, call Jim Eccleston.

Bill C. and Dan M.

LATEST NEWS AND ARTICLES

July 29, 2025
Stifel Faces Mounting Arbitration Losses Over Chuck Roberts' Structured Note Sales

Stifel Financial has reached another substantial settlement connected to a controversial structured note strategy promoted by Miami-based broker Chuck A. Roberts.

July 28, 2025
SEC Bars California Advisor for $4.6 Million Client Theft and Falsified Filings

The Securities and Exchange Commission (SEC) has permanently barred Andrew Nash, a Santa Barbara-based investment adviser, from the securities industry after alleging he misappropriated $4.6 million from a client and falsified regulatory filings to cover up the theft.

July 25, 2025
Former Merrill Lynch Broker Settles SEC Case Over $3 Million Investment Fraud

A former Dallas-based broker has settled civil charges with the Securities and Exchange Commission (SEC) after stealing nearly $3 million from his clients over nine years.