Tackling the “Low Hanging Fruit” in Achieving FINRA Compliance

Sylvia Scott, Attorney pic
Sylvia Scott, Attorney
Image: ffslaw.com

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

Financial Industry Regulatory Authority pic
Financial Industry Regulatory Authority
Image: finra.org

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

BTI Power Rankings pic
BTI Power Rankings
Image: bticonsulting.com

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 www.bticonsulting.com/power-rankings-for-law-firms.

Securities Regulatory Examinations for Broker-Dealers

Sylvia Scott, Attorney pic
Sylvia Scott, Attorney
Image: ffslaw.com

A Los Angeles Super Lawyer, attorney Sylvia Scott earned her juris doctor from the University of California Los Angeles, School of Law. As the head of the Securities Regulation Practice Group at Freeman, Freeman, and Smiley, LLP, attorney Sylvia Scott is experienced with regulatory examinations.

Regulatory examinations are a common occurrence within the broker-dealer community. The Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) conduct various examinations to evaluate regulatory compliance. These include cycle/routine examinations, sweep examinations, and cause examinations.

Cycle examinations are carried out by both FINRA and the SEC. They are conducted in a cyclical basis to identify the firm’s legal and regulatory compliance. The examinations, which form the bulk of broker-dealer examinations, are done using a risk-based approach.

Sweep examinations are done on a sample of firms. They focus on a specific area of business, such as sale of private placements, then evaluate how the selected firms deal with that specific area.

Cause examinations are carried out in situations in which the regulator believes there may be violations from a firm. Cause examinations can arise from customer complaints, tips, or press articles.

Cooperating with the FINRA and SEC Examiners

Financial Industry Regulatory Authority pic
Financial Industry Regulatory Authority
Image: finra.org

A Los Angeles attorney, Sylvia Scott earned her juris doctor from the University of California Los Angeles, School of Law. A partner at Freeman, Freeman, and Smiley, LLP, Sylvia Scott is an attorney representing brokers and financial advisors.

The Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) carry out routine examinations to investigate regulatory compliance within the companies under their jurisdiction. For securities brokers, therefore, regulatory examinations are not a rare occurrence, but rather occur at regular intervals.

Cooperating with the regulator’s examiner during these examinations is important. Some of the ways the firm can do this is by:

1) Designating a point person
This is a principal at the firm who will be directly responsible for interfacing with the examiner. For much larger firms, an entire department may be tasked with liaising with the examiner to facilitate a smooth examination.

2) Common courtesies
These include providing the examiner with adequate work space to conduct the examination. In the course of interaction, all employees of the firm should be responsive and courteous.

3) Maintain good communication
Do not lie to the regulators. Address any previous miscommunication, making sure to correct any issues that arise afterwards. Do not give the impression that you are out to frustrate or delay the examination.

Tips for Giving a Speech in a Professional Setting

Giving a Speech pic
Giving a Speech
Image: inc.com

Sylvia Scott is a Los Angeles-based attorney with over 30 years of experience in the legal sector. Apart from her work as a lawyer and partner with Freeman, Freeman & Smiley, LLP, attorney Sylvia Scott has given speeches on topics related to the securities industry at several professional conferences in the past.

Giving a speech to a large audience in a professional setting can seem like a difficult task, but a few tips can help make the process much easier and more enjoyable for your audience. For example, if you find yourself nervous beforehand, take the opportunity to walk through the room and make brief conversation with a few audience members. Familiarizing yourself with a handful of faces in the crowd may help you feel more comfortable looking out and making eye contact with the group as you speak.

At the beginning of your speech, establish a strong, confident stage presence to set the tone for your presentation. Making your way to the heart of the subject matter as soon as possible will keep audience members engaged. Similarly, try to remain cognizant of how fast you are speaking and try to rely on note cards and other written material as little as possible.

A strong conclusion to your speech will leave a lingering impression. Depending on the subject of your address, consider closing with a statement that uses contrast, rhetorical questions, or a call to action to drive your point home.