In late October, FINRA issued a sweep exam, commanding firms to produce 15 categories of documents about firm's cross-selling programs over a 5-year span. The sweep seeks information on cross-selling, including incentives and compensation, tracking and performance metrics, complaints and discipline, compliance and supervision, among others. The letter also imposes a November 15 response deadline.
The sweep letter does not expressly refer to the recent Wells Fargo cross-selling scandal or to Senator Warren's ensuing broad-side calling for SEC Chair White's resignation, but it does specifically ask for management or Board-level reviews of cross-selling that were initiated on or after September 1, 2016.
So, beyond potentially improper cross-selling itself, the take-away is that any major scandal in the headlines should prompt some level of self-evaluation on the scandal's topic.
The targeted exam letter is here.
Thomas K. Potter, III (tpotter@burr.com) is a partner in the Securities Litigation Practice Group at Burr & Forman, LLP. Tom is licensed in Tennessee, Texas and Louisiana. He has over 30 years' experience representing financial institutions in litigation, regulatory and compliance matters. See attorney profile.
© 2016 by Thomas K. Potter, III (all rights reserved).
PartnerTom Potter is a Partner in the firm's Nashville office and has over 35 years of experience representing business interests in securities and corporate disputes.
Tom represents broker-dealers and investment bankers in disputes ...
