"Or Worse, Expelled."
Broker Dealer Law Blog
Hermione Granger (yes, from Harry Potter) is famously attributed with the following quote: “I’m going to bed before either of you come up with another clever idea to get us killed. Or worse, expelled.” Unfortunately, cleverness failed to save Salomon Whitney Financial, LLC (SW Financial) recently when FINRA announced that it had followed through with its threats of increased enforcement efforts and expelled the firm and suspended its co-owner and CEO, Thomas Diamante.
FINRA announced on Friday, May 12, that it was expelling SW Financial, in part, because it had violated Regulation Best Interest (Reg BI). This is the first time FINRA has expelled a firm since Reg BI took effect in June 2020. The move by FINRA, however, tracks with its increased rhetoric that it will be cracking down on brokerage firms for Reg BI violations. As we have previously reported, the Division of Examinations of the Securities and Exchange Commission (the Division) has been busy implementing broker-dealer examinations to assess compliance with the regulation.
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