The firm’s surveillance system generated more than 10,000 alerts over a two-month period. It also flagged approximately 15.2 million items over a two-year period with over 5.2 million still unreviewed at the time of the disciplinary action. If that were not enough – and stop me if you have heard this before – the compliance department often relied upon one person. See https://www.leaprate.com/financial-services/rules-and-regulation/finra-fines-velocity-clearing-1m-over-supervisory-failures/. This was a recipe for failure.
I’ve heard that when everything is treated as urgent, nothing truly is. This is particularly applicable to broker-dealer and RIA compliance systems, and especially with email review. Investing time to refine surveillance patterns to pinpoint genuinely concerning scenarios and/or tailoring these to the firm’s business is often time well spent.
Because broker-dealers, registered investment advisers and their associates want to spend their time serving their clients, not their regulators.
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