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September 01, 2015 5:33 PM ET

Diversified Financial Services

Company Overview of Financial Industry Regulatory Authority, Inc.

Company Overview

Financial Industry Regulatory Authority, Inc. (FINRA) is a trade association that provides regulatory, consulting, and advisory services focusing on financial services and securities brokerage companies. The organization offers registration, dispute resolution, federal securities law enforcement, market surveillance and analysis, and regulatory policy formulation and implementation services. FINRA, formerly known as National Association of Securities Dealers, Inc., was founded in 1938 and is headquartered in Washington, District of Columbia.

1735 K Street

Washington, DC 20006

United States

Founded in 1938

Phone:

202-728-8000

Fax:

202-293-6260

Key Executives for Financial Industry Regulatory Authority, Inc.

Executive Chairman of Board of Governors and Chief Executive Officer
Age: 64
Executive Vice President and Chief Financial Officer
Senior Vice President and Regional Director of New York Region
President of Dispute Resolution, Executive Vice President, and Chief Hearing Officer
Executive Vice President and Director of Dispute Resolution
Compensation as of Fiscal Year 2015.

Financial Industry Regulatory Authority, Inc. Key Developments

FINRA Slaps Charles Schwab & Co. with $2 Million Fine over Net Capital Deficiencies, Supervisory Failures

FINRA announced that it censured and fined Charles Schwab & Co. Inc. $2 million for net capital deficiencies and related supervisory failures. FINRA announced that net capital deficiencies occurred on three separate dates in 2014, and ranged from $287 million to $775 million. The regulator found that on three occasions between May 15, 2014, and July 1, 2014, the company was net capital deficient up to $775 million. The deficiencies arose because on each of those dates, the company had inflows of cash that exceeded the amounts it could invest with existing facilities. Instead, Charles Schwab & Co. transferred $1 billion to its parent company for overnight investment. The company's treasury group approved the transfer as an unsecured loan under a revolving loan agreement without consulting its regulatory reporting group as to how the transfers would impact the company's net capital position.

FINRA Fines Newbridge Securities Corporation, Beta Capital Management, LLC and Atlas One Financial Group, LLC for Allegedly Failing to Report Information on Certain Transactions Within Required Time Frame

FINRA fined Newbridge Securities Corp., Beta Capital Management LLC and Atlas One Financial Group LLC for failing to report certain transactions within the required time frame, according to the regulator's list of disciplinary actions for August. Newbridge Securities agreed to pay FINRA $22,500 over charges that the company failed to report information concerning 70 purchase and sale transactions effected in municipal securities for customers to the real-time transaction reporting system within the required time frame. Beta Capital reached a $7,500 settlement with the regulator over charges that the company failed to report in a timely manner certain transactions in Trade Reporting and Compliance Engine-eligible corporate debt securities. Atlas One Financial also agreed to a $25,000 settlement with FINRA relating to charges that the company failed to report in a timely manner certain transactions in TRACE-eligible securitized products between April 1, 2014, and June 30, 2014. The companies agreed to settle without admitting to or denying the regulator's charges.

FINRA Fines StockCross Financial Services, Inc. $800,000 for Regulation SHO Violations

The Financial Industry Regulatory Authority (FINRA) announced that it has fined StockCross Financial Services, Inc. $800,000 for Regulation SHO violations and for related supervisory violations that spanned more than three years. As part of the sanctions, StockCross is ordered to provide a report to FINRA regarding the effectiveness of its Reg SHO supervisory system within six months. After completion of a sales transaction, firms are required to deliver the shares transacted to a registered clearing agency for settlement. If the shares are not delivered by the appropriate date, SEC’s Reg SHO requires the firm to take affirmative action to close out the failure to deliver by purchasing or borrowing the securities. The firm must be net flat or long in the relevant security at the end of the “close-out” date. If the failure to deliver is not closed out, the firm may not accept additional short sale orders in the security without first borrowing or arranging to borrow the security. FINRA found that from November 2009 to May 2013, StockCross’ system to monitor and track its close-out obligations was fundamentally flawed because StockCross did not believe it was required to be either net flat or long in a security at the end of the day on which it purchased shares to meet its close-out obligation. In fact, after the purchase transactions had been executed, the firm did not put any limit or restrictions on the remainder of the day’s trading activity in that security. StockCross’ flawed system caused the firm to have a failure to deliver for seven or more consecutive settlement days on approximately 1,826 occasions. Additionally, StockCross executed at least 4,132 short sales at a time when it had an outstanding close-out obligation for such securities, and did not first borrow or arrange to borrow the security. In addition, FINRA found that StockCross did not have a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with Rule 204 of Regulation SHO. In concluding this settlement, StockCross neither admitted nor denied the charges, but consented to the entry of FINRA's findings.

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