The U.S. Securities and Exchange Commission’s Division of Enforcement

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U.S. Securities and Exchange Commission

A lawyer who has focused for many years on securities investigations and cases, Sylvia Scott is a partner in the Los Angeles-based law firm of Freeman, Freeman & Smiley, LLP. Sylvia Scott also spent 6 years as an attorney with the U.S. Securities and Exchange Commission (SEC), where she concluded her tenure there as an assistant director.

The SEC encompasses several divisions, including the Division of Enforcement that was created to bring together the enforcement activities of all SEC divisions. The SEC performs independent investigations and recommends prosecution in the federal courts regarding any violations of the federal securities laws.

The Division of Enforcement began in 1972 and seeks injunctions with civil suits, prohibiting violators from continuing the actions that are thought to be in violation of the federal securities laws. The Commission has the ability to use several different administrative proceedings, including cease and desist orders, as well as revocation or suspension of business registration, to achieve its objectives.


Tackling the “Low Hanging Fruit” in Achieving FINRA Compliance

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Sylvia Scott, Attorney

Sylvia Scott is an attorney with the Los Angeles-based corporate law firm Freeman, Freeman and Smiley, LLP, and leads the Securities Practice Group. Attorney Sylvia Scott emphasizes the importance of businesses large and small taking a proactive role in evaluating their internal compliance functions, in ways that correspond with FINRA risk-based criterion for cycle exams.

Assessments can be complex and time consuming, with their true value only emerging when FINRA exams occur. That said, there are a number of “low hanging fruit” targets on which examiners will focus. This reflects a tendency on the part of FINRA investigators to focus on rule violations that are simple to identify and easy to prove.

Easily remediable violations include creating comprehensive and up-to-date written supervisory procedures. This involves the formalizing of practices that may already exist informally, particularly among small companies. Another aspect of this centers on Form U4s, which fully disclose recent activities such as creditor settlements and bankruptcies. It pays to carefully review U4 update requirements, as some aspects of reporting are counterintuitive. Finally, new account forms and applications should be properly filled out and update, as failure to do so is considered a significant regulatory breach.

The Culture of Compliance and FINRA

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Financial Industry Regulatory Authority

Sylvia Scott is an attorney and partner at the Los Angeles law firm Freeman, Freeman & Smiley, LLP. Named a Super Lawyer in multiple years, Sylvia Scott has also authored articles for legal journals on topics related to compliance with FINRA regulations in conjunction with her role as an attorney.

Each year, FINRA releases its Annual Regulatory and Examination Priorities Letter in order to disseminate information among businesses about important issues as they relate to compliance with FINRA’s regulatory programs. In 2016, one of the main emphases of FINRA’s letter was a stringent focus on firm culture. FINRA asserted that it would put focus on determining if examined firms supported a “culture of compliance.”

In order to facilitate a culture of compliance, businesses are expected to exhibit a commitment to five core facets of operations. These operations encompass such issues as whether or not employees abide by control functions, whether leaders tolerate the violation of control breaches, and how much effort a company puts into seeking out instances of risk and compliance. Additionally, employees in positions of power must display a strong commitment to a compliant firm culture for the benefit of their teams. Sub-cultures within the corporate structure must also be monitored to make sure that operations fall under direct conformity with the company’s overall commitment to compliance.

BTI Power Rankings Reveal Law Firms with the Best Client Relationships

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BTI Power Rankings

Freeman, Freeman & Smiley, LLP attorney and partner and lawyer Sylvia Scott leads the firm’s Securities Regulation Practice Group and maintains a reputation of successfully representing clients in a variety of securities regulation and litigation cases. Sylvia Scott’s firm also received recognition from the BTI Power Rankings 2016: The Law Firms with the Best Client Relationships, for which it landed in the top five percent in the financial services industry.

The BTI Power Rankings provides recognition to firms that place the client first and go above and beyond to form strong bonds with their clients. It analyzes direct feedback from corporate counsel and examines the strength of firm-client relationships in 16 industries using in-depth interviews. Relationship strengths are measured through three criteria; which businesses clients name as their go-to companies, which firms clients most recommend to peers, and which firms receive both recommendations and commendations from clients.

The final criteria falls under a BTI classification known as Clientopia, which the organization considers the ideal state of a client relationship. Law firms that reach the Clientopia level continue to win work from existing clients while simultaneously earning the respect of new ones. Therefore, a strong client relationship gives the firm a competitive edge and serves as a market differentiator.

Studies conducted in order to identify and rank companies on the BTI Power Rankings use independent funding and rely completely on interviews with C-level executives and service leaders, such as general counsel, chief audit officers, and chief financial officers.

To learn more about the BTI Power Rankings, visit

American Bar Association Membership

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American Bar Association

A designated Super Lawyer for each of the last three years, Sylvia Scott serves as an attorney and partner at Los Angeles-based firm Freeman, Freeman & Smiley, LLP. In her career as an attorney, Sylvia Scott has focused on the areas of business, employment, and securities industry litigation. She has been a featured speaker at conferences sponsored by the American Bar Association (ABA)and Practicing Law Institute.

Partner Guides Representation, SEC Rewards Whistleblower

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Sylvia Scott, Attorney

Attorney Sylvia Scott brings more than half a decade of experience with the Securities and Exchange Commission (SEC) to her role as partner at Freeman, Freeman, and Smiley, LLP. Head of the firm’s Securities Practice Group, attorney Sylvia Scott well understands SEC objectives and uses this knowledge to guide representation of brokers and investment advisers before the SEC.

Each year the SEC issues a letter setting forth its priorities. The expertise that Sylvia Scott brings to the table can assist brokers and investment advisers to navigate and understand these priorities.

2016 FINRA Regulatory and Examinations Priorities Letter

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Financial Industry Regulatory Authority

A partner at Freeman, Freeman, and Smiley, LLP, Sylvia Scott is an attorney based in Los Angeles, California. Recognized in 2015 as a South California Super Lawyer, Sylvia Scott advises clients on how to follow the Financial Industry Regulatory Authority’s (FINRA’s) annual Regulatory and Examinations Priorities Letter.

FINRA’s annual Regulatory and Examinations Priorities Letter offers brokerage companies a guide to concerns the regulator will be paying close attention to that year.

FINRA’s 2016 Regulatory and Examination Priorities Letter was issued on January 5. It is the regulator’s 11th annual priorities letter. Existing and emerging risks outlined in this year’s letter include:

1) Interest rates. Giving the recent hiking of interest rates, FINRA will be concerned with interest rate-sensitive customer offerings by individual firms.

2) Culture, ethics, and conflicts. FINRA recognizes that each firm has its own culture and that such a culture has a profound impact on the way the company conducts its operations. FINRA will this year seek to understand each firm’s culture with regard to five indicators: how control functions are valued, whether control breaches are condoned, whether supervisors act as role models, whether the company routinely carries out risk assessments, and whether nonconforming subcultures are identified and addressed.

3) Liquidity. Unchecked liquidity has contributed to many firms’ failures. FINRA will this year look at firms’ contingency funding and effective practices.