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.


University of California, Los Angeles Hosts Sixth Annual Tax Symposium

University of California, Los Angeles pic
University of California, Los Angeles
Image: law.ucla.edu

A securities regulation and litigation lawyer with over 30 years of legal experience, Sylvia Scott serves as an attorney and partner at the California-based Freeman, Freeman & Smiley, LLP and manages its Securities Regulation Practice Group. Sylvia Scott received her juris doctor from the University of California, Los Angeles School of Law (UCLA Law), which hosts a variety of events that include the Sixth Annual NYU/UCLA Tax Policy Symposium.

The annual Tax Symposium focuses on tax policy issues from a legal and economic perspective and establishes a forum for policymakers, scholars, and practitioners to perform analyzations and consider reform options. Hosted in conjunction with the New York University of Law (NYU Law), the conference builds on the symposia traditionally presented by NYU Law’s tax policy scholarship law journal and the UCLA Colloquium on Tax Policy and Public Finance.

UCLA Law students, faculty, staff and invited guests may participate in the Sixth Annual Tax Symposium, which will focus on the theme of tax policy and social mobility. Participants may also take part in minimum continuing legal education credit opportunities approved by the California State Bar. The symposium will take place on October 7, 2016 and will receive co-sponsoring by the NYU School of Law and the UCLA Law’s Lowell Milken Institute for Business Law and Policy.

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.

American Bar Association Membership

American Bar Association pic
American Bar Association
Image: americanbar.org

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.

Supervisory Examinations – A Look into Procedures and Typing

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

Freeman, Freeman, and Smiley, LLP, partnering attorney Sylvia Scott has over 25 years of legal experience. She represents clients in cases involving all aspects of securities regulation and litigation. Attorney Sylvia Scott also defends clients against grievances filed by the Financial Industry Regulatory Authority (FINRA). She has authored numerous articles utilizing her knowledge of the organization. Previous article topics include supervisor liability and supervisory examinations.

Investigations by FINRA and the Securities and Exchange Commission often include supervisory examinations. In the event that an examination takes place, it is beneficial for supervisors to understand the investigation process. Examinations focus on evaluating the firm’s written supervisory and compliance procedures (WSP). Supervision cases tend to fall into one or more of three categories: implementation of inadequate procedures, failure to implement or follow existing procedures, and failure to respond to red flags warning signals of potential violations.

Differing variables from company to company require examiners to approach each case with a fresh perspective. Examinations generally begin with an evaluation of the company’s WSPs and a review of any related documents, reports, or outside business questionnaires. This evaluation determines the WSP’s adequacy in addressing a given prohibition or requirement. A number of factors affect the examiner’s final decision including the firm’s size, nature of business, and organizational structure.

Following evaluation, the examiners will compare the company’s implementation procedures and compliance history to its individual WSPs. They will also assess the supervisor’s track record in responding to WSP violations and red flags. Examiners base their final decisions on the answers to a series of questions posed throughout the examination process that address the reasonability of existing WSPs, steps taken to implement them, and actions taken against alleged misconduct.

Partner Guides Representation, SEC Rewards Whistleblower

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

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

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

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.