Securities Industry
Regulatory Compliance

Securities Industry
Regulatory Compliance

Russell C. Weigel, III, P.A. assists financial services providers manage their legal exposure to attacks from regulators and customers. We encourage firms of all sizes and ages to maintain a close rapport with experienced securities counsel. We assist fledgling firms organize and obtain requisite broker dealer and investment adviser licensing, among others.

On behalf of the SEC, Securities Attorney Russell Weigel investigated many broker dealers, including bank broker dealers, investment advisers, and investment companies. Having been inside the regulator, we know well that every securities industry organization registered with a state or federal securities regulator is a potential deep pocket target for a plaintiff’s attorney or an opportunity for government publicity at the firm’s expense. On behalf of the SEC, Mr. Weigel has sued numerous investment advisers, for example, for non-compliant performance advertising, record keeping, and disclosure violations. Such actions can result in, among other sanctions, license revocations, suspensions and large fines in addition to substantial or total loss of customer business and industry unemployability.

With SEC-registered investment company and investment adviser clients being audited by regulators on a profile basis, we recommend that our clients perform periodic internal compliance reviews and corporate investigations to detect and cure problems before they can damage the firm or harm any investor. Such reviews should be performed by an attorney familiar with litigation risks and SEC and SRO rules, experience that we possess. Typically, the legal review process is designed to eliminate major liabilities and may focus on the firm’s policies, procedures and actual practice of supervisory functions, client agreements, advertising and marketing, order execution, record keeping, and customer complaint handling policies and procedures. Legal reviews may be supplemented with analytical support from an experienced accountant or securities analyst in identifying minor liabilities such as books and records deficiencies. We often work with former SEC examiners and accountants personally known to us who can provide such supplemental assistance.

Unfortunately, many securities firms hire legal counsel from a securities attorney only after a problem has arisen and after the regulators have conducted routine or cause examinations or after investors have suffered compensable losses. Of necessity, damage control is the strategy, including voluntary reparation of any injured investor, possible restriction of employee activities, heightened supervision, or summary discharge of certain employees, and cooperation with and advocacy to the regulatory staff to deter the escalation of an inquiry into a public enforcement proceeding. When clients receive document and/or testimony requests by subpoena or by letter or perhaps become defendants or respondents in regulatory actions, we advise our clients on the probable outcomes of any course of action so that clients make informed choices of their risks and probable costs. Protection of a client’s public reputation typically is one of our considerations.