October 3, 2022

Volume XII, Number 276


October 03, 2022

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FINRA Requests Amendment Comments & Phishing Alert

FINRA Requests Comments for Proposed Amendments to FINRA Rule 2165

On October 5, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 20-34, which requests comment on proposed amendments to Rule 2165. In August 2019, FINRA conducted a retrospective review to evaluate the effectiveness of its rules and processes related to the protection of seniors. Based on the results received from their review, which are also reflected in Regulatory Notice 20-34, FINRA has proposed amendments to FINRA Rule 2165 that are intended to address suspected financial exploitation of senior investors.  Rule 2165, among other things, permits a member firm to place a temporary hold on a disbursement of funds or securities from the account of a “Specified Adult” (i.e., a natural person age 65 and older or a natural person age 18 and older who the member reasonably believes has a mental or physical impairment that renders the individual unable to protect his or her own interests). FINRA asserts that temporary holds on disbursements are crucial in providing member firms a way to quickly respond to suspicions of financial exploitation before the customer suffers any potential significant losses.

FINRA requests comment on all aspects of the proposed amendments to Rule 2165 and has enumerated a list of specific issues that they are requesting to be specifically addressed.

The comment period expires December 4.

A copy of Regulatory Notice 20-34 is available here.

FINRA Alerts Firms to Widespread Phishing Email

The Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 20-35, alerting firms of an ongoing phishing campaign that involves fraudulent emails purporting to be from FINRA asking member firms to complete a survey. The email was sent from the domain “@regulation-finra.org” and was preceded by “info” followed by a number, e.g., [email protected]. FINRA recommends that anyone who has clicked any link or otherwise engaged with the email to immediately notify the appropriate personnel in his or her firm to rectify any potential issues.

See Regulatory Notice 20-35 for additional information and a sample of the fraudulent email.

©2022 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 283

About this Author

Gregory Uffner, Financial Services Attorney, Katten Law Firm

Gregory Uffner is an associate in the Financial Services practice. 

While in law school, Gregory was an associate editor for the Moot Court Board, a member of the Fordham Urban Law Journal and served as managing editor for the Fordham Sports Law Forum.

Susan Light, Katten Law Firm, Finance Law Attorney, New York

Susan Light focuses her practice on financial services regulatory matters. She counsels broker-dealers, hedge funds, investment banks and financial services clients on enforcement issues involving the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), other self-regulatory organizations (SROs) and state and federal regulatory authorities. She has particular experience related to sales practice issues, financial and operational issues, anti-money laundering, crowdfunding, cybersecurity, and cryptocurrencies.

Michael T. Foley, Katten, Lawyer, Finance, FINRA, Chicago
Special Counsel

Michael Foley represents broker-dealers, investment advisers and other financial services industry participants with respect to a broad spectrum of legal and regulatory matters arising under the federal securities laws.

Michael has nearly 20 years of experience in private practice and in-house at both a large, full-service broker-dealer and at an online discount broker-dealer, advising broker-dealers and other financial institutions regarding compliance with the federal securities and commodities laws, and with the regulations of the US Securities and Exchange...