The Financial Industry Regulatory Authority, Inc. (FINRA) posts disciplinary actions to an online database. It also publishes a monthly summary of these actions, which is a worthwhile read for those in the industry—if only for insight into FINRA’s current priorities. Below, I offer my thoughts on FINRA’s September 2026 edition.
The Missing Second Opinion
There is a reason we seek second opinions.
Whether choosing a contractor, making a major purchase or considering a medical procedure, another perspective can help us see something we might otherwise miss.
Of course, a second opinion is only useful if it offers an independent assessment. Asking someone who already agrees with us may provide reassurance, but not necessarily better information.
Compliance reviews can present a similar challenge.
One matter in FINRA’s September report brought this to mind. In this, a firm assigned responsibility for conducting due diligence on a private real estate offering to a representative who was affiliated with, and continued receiving compensation from, the real estate development company. The firm approved sales without determining whether the due diligence was independent. FINRA also found deficiencies in the firm’s supervisory procedures and other aspects of the offering.
In June’s Ask One More Question, I discussed the importance of questioning supervisory processes rather than simply relying on them. July’s Check the Box and Miss the Point explored the difference between completing a review and accomplishing its purpose. September’s report raises a related question.
The Lesson
There is value in experience and familiarity. They help us make decisions efficiently and with confidence. But they can also make it easier to overlook alternatives.
In August’s Recalibration, I discussed the importance of making sure established processes remain appropriate for the business. September’s report offers another reminder: A meaningful review should do more than confirm an existing decision. It should consider other possibilities, question potential conflicts and remain open to a different conclusion.
A second opinion will not always change the answer. But it can give us greater confidence that we arrived at the right one.
Because broker-dealers, registered investment advisers and their associates want to spend their time serving their clients.
Read More
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- Law and Order – June 2026
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- About
