
By Bill Reilly
Subscribe to our original industry insightsThe NASAA 2020 Enforcement Report, based on 2019 activity, summarizes enforcement activity reported by the 51 U.S. member jurisdictions. Enforcement actions against firms and individuals in 2019 totaled 2,755 actions, up 33% from 2018.
Overall enforcement activities included:
In an effort to keep “bad actors” from operating in registered capacities, the states imposed approximately 1,000 registration sanctions and sought registration/license withdrawals from more than 4,800 firms and individuals, a 7% increase from 2018. Registration withdrawals are generally requested when a state may be investigating, or preparing to initiate action to deny, suspend, revoke or restrict a registration.
Regarding registered firms and individuals, the report indicates a total of 1218 actions, a 7% increase over 2018, with the following number of actions:
The numbers are consistent with the trend of actions for RIAs/IARs, which has been increasing since 2014, when RIAs represented only 9% of respondents.
Much of the report was dedicated to the efforts to protect seniors and vulnerable adults. By mid-2020, 28 states had adopted regulations based upon the NASAA Model Act to Protect Vulnerable (Senior) Adults from Financial Exploitation.
Reviewing the Oyster Consulting matrix for reporting requirements for suspected financial exploitation to state securities regulators and adult protective service agencies is a good place to start to understand your requirements.
DownloadIn 2019 states received 709 reports from BDs and RIAs, opening 233 investigations, 92 delayed disbursements, and bringing 15 enforcement actions.
The top investment products/sales tactics in senior-related enforcement actions included:
The following broader themes were also covered:
The report also noted that a substantial number of COVID-19 related investigations are currently on-going which will be addressed in the 2021 report.
For more information about the NASAA 2020 Enforcement Report, how state regulations may affect your firm or how Oyster can help your firm achieve regulatory compliance, contact us or call (804) 965-5400 and we will be happy to help you.
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