Newsletters

December 2009 Anti-Money Laundering Regulatory Focus

This month FIRE Solutions is featuring a document called, "Anti-Money Laundering - Regulatory Focus" This excerpt from one of our courses, AML Current Issues 2009, highlights the emerging money laundering trends and efforts by enforcement agencies to eliminate them. From this article, you will learn the following:

  • How economic conditions are once again ripe for the movement of "hot money" (illicit funds) from Russia to the United States and other currency safe havens.
  • Why regulators and law enforcement agencies are moving aggressively to prevent mortgage loan fraud and related money laundering cases.
  • What the FATF has put into special alerts over the expanding use of Internet payment systems to launder money.
  • Which regulators are placing greater emphasis on financial institutions' proper implementation of enhanced due diligence (EDD) on correspondent accounts maintained by and for non-U.S. Citizens.

AML Current Issues 2009 reviews the most current and prominent AML rules violations, penalties and fines imposed against banking and broker dealer firms. The objective is to highlight what, where, why and how some firms went astray and also to show how often the root cause of the problem lay in failure to develop, document, implement and properly (independently) test AML and CIP procedures.

The more detailed case studies and current issues reviewed in this course highlight real-world schemes and how they were pulled off. While money-laundering operations often originate away from the immediate view of financial institutions, substantial sums ultimately find their way into banks and broker/dealer firms.

In this Firm Element Continuing Education course, your representatives will learn how Money Laundering Schemes were detected and reported by alert representatives who noticed when "things just didn't add up" and decided to probe a bit further. These actions ultimately resulted in arresting the money laundering activity and preventing the representative's firm from unwittingly facilitating the illegal activity.

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November 2009 Anti-Money Laundering Regulatory Focus

This month FIRE Solutions is featuring a document called, "Anti-Money Laundering - Regulatory Focus" This excerpt from one of our courses, AML Current Issues 2009, highlights the emerging money laundering trends and efforts by enforcement agencies to eliminate them. From this article, you will learn the following:

  • How economic conditions are once again ripe for the movement of "hot money" (illicit funds) from Russia to the United States and other currency safe havens.
  • Why regulators and law enforcement agencies are moving aggressively to prevent mortgage loan fraud and related money laundering cases.
  • What the FATF has put into special alerts over the expanding use of Internet payment systems to launder money.
  • Which regulators are placing greater emphasis on financial institutions' proper implementation of enhanced due diligence (EDD) on correspondent accounts maintained by and for non-U.S. Citizens.

AML Current Issues 2009 reviews the most current and prominent AML rules violations, penalties and fines imposed against banking and broker dealer firms. The objective is to highlight what, where, why and how some firms went astray and also to show how often the root cause of the problem lay in failure to develop, document, implement and properly (independently) test AML and CIP procedures.

The more detailed case studies and current issues reviewed in this course highlight real-world schemes and how they were pulled off. While money-laundering operations often originate away from the immediate view of financial institutions, substantial sums ultimately find their way into banks and broker/dealer firms.

In this Firm Element Continuing Education course, your representatives will learn how Money Laundering Schemes were detected and reported by alert representatives who noticed when "things just didn't add up" and decided to probe a bit further. These actions ultimately resulted in arresting the money laundering activity and preventing the representative's firm from unwittingly facilitating the illegal activity.

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September 2009 Duty To Investigate

This month FIRE Solutions is featuring a document called Your Duty to Investigate. This excerpt from one of our newest courses, Preventing Illegal Resales of Restricted and Unregistered Stock, highlights the "red flag" activities that should prompt an investigation of potentially illegal resales, and provides a list of indicators that will allow the firm to complete a transaction with confidence, or warrant a further probe.

Protect your firm from unwittingly becoming a participant in the illegal distribution of unregistered and restricted stock into the public markets.

In many case studies that illustrate a failure to supervise, the words, "the firm knew or should have known" appear. This phrase is at the heart of many firm's surveillance programs and supervisory controls. Your Duty to Investigate helps you and your firm identify when you "should have known" to investigate.

Click here for your copy of the "Your Duty to Investigate" document.

For a more complete understanding of Illegal Resales, our Preventing Illegal Resales of Restricted and Unregistered Stock Firm Element Continuing Education course and Annual Compliance Meeting (ACM) topics include a full description of the following concepts:

  • Various ways restricted stock can be acquired
  • Red flags to identify potentially illegal activities
  • When does a firm have an obligation to investigate?
  • Best practices policies and procedures to prevent the illegal resale of restricted and unregistered stock
  • Elements of the initial assessment
  • The final review and approval process
  • A firm's follow-up obligations

Whereas SEC Rule 144 and 144A covers the proper resale of restricted stock, this course illustrates a firm's obligations to detect and investigate abusive practices related to the unregistered resale of restricted stock.

This course looks at the types of activities that are considered a "red flag" for suspicious activity that should prompt an investigation. Under SEC Rule 144, firms have specific investigation obligations determining when the firm knows or should have known about suspicious activities. Finally, the adoption of adequate best practices will help in preventing your firm from becoming a "should-have-known" case study.

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August 2009 - Third-Party Research Reports

This month FIRE Solutions is featuring a document called "Disclosure and Supervision of 3rd Party Research Reports." This excerpt from one of our courses, Distribution of 3rd Party Research Reports, is designed to minimize, through disclosure, the conflict of interest inherent in the distribution of all types of research reports. After reading this report you will understand:

  • The distinction between "third-party research" and "independent third-party research"
  • The subtle differences in motivation between "third-party research" and "independent third-party research"
  • Basic disclosure requirements for research
  • Required disclosures when distributing 3rd party research
  • How to document the supervision of third-party research reports proposed for distribution

The Distribution of 3rd Party Research Reports course is designed to help representatives identify the various types of research analysts, their motives, as well as their own disclosure and supervision requirements. This course describes the business of research along with its influences and the conflicts that require disclosure. Highlights of the course include:

  • The Evolution of Research Analyst Regulations
  • Sell-Side vs. Buy-Side Analysts
  • The Business of Research
  • The Role of Third Party or Independent Research
  • Definitions of Various Types of Research Reports
  • Disclosure Requirements for Various Types of Research Reports and for Those Who Distribute Them
  • Supervision

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July 2009 - Identity Theft

On August 1st, 2009, FINRA will begin enforcement of the Federal Trade Commission's FACT Act regulations. Under the FACT Act, member firms who are considered either a "financial institution" or a "creditor," and offered "covered accounts," are required to develop and implement an Identity Theft Prevention Program (ITPP) that will "deter, detect, and prevent the unauthorized access and use of confidential and sensitive client information." For more information about FACT Act applicability and the Act's definitions of "financial institution", "creditor", and "covered account", see FINRA's Regulatory Notice 08-69.

For a full lesson on FACT Act requirements, our Firm Element continuing education course and our Annual Compliance Meeting topic, "Identity Theft - Red Flags," includes a full description of the following concepts:

  • The Federal Trade Commission - FACT Act
  • Who must comply with the FACT Act?
  • What information must be protected?
  • Identity Theft Prevention Methods
  • Consumer credit reports
  • Information disposal
  • The "Red Flags" of identity theft
  • Red Flag response protocols
  • Customer notification requirements
  • Best practices when disseminating data
  • Employee use of confidential and sensitive information
  • Pretexting
  • Phishing
  • Trojan horse
  • Road apple
  • Wi-Fi in public

This course examines the primary rules that protect customer information and the role that employees play in identifying identity theft red flags. Finally, the course covers various methods used by hackers that steal customer identities.

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June 2009 - FINRA Course Offerings

Through an agreement with FINRA, FIRE Solutions is pleased to announce we are now offering a selection of FINRA's e-learning courses, including:

  • AML-Institutional: Recognizing Red Flags
  • AML-Retail: Exploring New Risks
  • Retail Branch Office Supervision: Compliance with Regulations
  • Conflicts of Interest
  • Debt Mark-Ups
  • Fixed Income Suitability: Retail Sales Practices
  • Retail Branch Office Supervision: Understanding Supervisory Responsibilities
  • Structured Products
  • Supervision: Obligations for Firms with Institutional Clients

All FINRA courses have been seamlessly integrated into FIRE's Firm Element Continuing Education platform, offering all the benefits you've come to expect from FIRE:

  • One-step enrollment
  • Automated welcome and reminder emails with custom wording and frequency
  • Single-point login and access to FINRA and FIRE Firm Element courses
  • Self-enrollment and credit card processing options
  • 24/7 progress reporting
  • End-of-program completion binder
  • FIRE's renowned customer service

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May 2009 - Due Diligence for New Products

This month, FIRE Solutions is featuring a document called "Due Diligence - Asking the right questions." In this excerpt taken from our New Products continuing education course, we focus on the questions that regulators want you to ask when considering a new product offering at your firm.

In an ever-changing economic environment, representatives continue to seek new ways of providing higher returns and lower risks. Many times that search leads to new products or non-conventional investments. Our New Products course outlines the regulatory expectations for approving, selling, and supervising these products; it also describes how to determine what a "new product" is, and provides specific definitions to many popular non-conventional investments. Finally, students learn the suitability factors specific to non-conventional investments. With this knowledge, students will understand the importance of the review and approval process and be able to describe the regulatory expectations surrounding new product offerings.

The complete New Products course includes a full description of the following concepts:

  • How to determine what a "new product" is
  • The vetting process
  • The due diligence process
  • Suitability of non-conventional products
  • Post approval review and follow up

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April 2009 - Mutual Fund Approval Checklist and Red Flag Surveillance Tool

This month FIRE On Your Side is featuring two supervisory tools from one of our newest courses, Mutual Fund Supervision --A Mutual Fund Approval Checklist and a Red Flag Surveillance Tool.

The term, "Failure to Supervise," can be a haunting concept for new supervisors, branch managers, and even seasoned compliance officers. It conjures up a fear of "What don't I know?" These tools are designed to help you answer that question confidently.

Our Mutual Fund Approval Checklist is a starting point in keeping the supervision of mutual fund transactions consistent and all inclusive with respect to the applicable rules that govern the sale of mutual funds.

Our Red Flag Surveillance Tool is a list of activities that indicate that further explanation or investigation is required. Many of the items rely on human deduction and go above and beyond the alerts that could be generated from your firm's trading systems. Click here for your copy of both tools.

For a full lesson on Mutual Fund Supervision, our Firm Element continuing education course, Mutual Fund Supervision, includes a full description of the following concepts:

  • The importance of disclosure with respect to investor confidence
  • How late trading and frequent trading affect shareholder returns
  • Breakpoint concerns for mutual fund sales
  • Duties of representatives and supervisors to ensure that customers pay the proper commissions with their mutual fund purchases
  • Proper disclosure for exchanges in mutual funds
  • Checklist for review and approval of mutual fund transactions "
  • Red Flag" indicators that signal a need for further investigation of a mutual fund transaction.
  • "Mutual Fund Suitability Characteristics" chart as a reference guide

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March 2009 - Madoff Scandal Highlights the Importance of Ethics

On March 12th's Bloomberg Radio Surveillance broadcast, Bruce Foerster, President of South Beach Capital Markets spoke with Bloomberg's Tom Keene and Ken Prewitt about the Madoff scandal, and the importance of ethical dealings in the financial markets. These have been, and will continue to be, the subject of increased scrutiny from government and industry watchdogs.

Not surprisingly, many firms are focusing a spotlight on ethics and ethics training, and how they can be sure that their employees have been properly schooled in ethical practices. Online learning provides a scalable way to quickly and easily deliver and track ethics training. FIRE Solutions has been in the business of delivering web-based ethics training for over a decade, and can help you address this vital need and, at your option, simultaneously fulfill part of your Firm Element Continuing Education requirement.

FIRE's Ethics course offerings include:

  • Ethics (General)
  • Ethics for Futures Reps
  • Ethics (Institutional)
  • Ethics and Non-Cash Compensation
  • Ethics for Research Analysts
  • Market Conduct (Late Q2)

All of these courses have been updated for 2009, and are available for immediate online delivery to your employees. FIRE’s 24/7 reporting and completion binders insure that course participation is tracked and available both during and after course delivery. To access our complete course catalog, click here.

FIRE Solutions is committed to providing the Financial Services community with best-of-breed compliance and training solutions.

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January 2009 - The Perfect Financial Storm 2009 - How Did it Happen? Including Bottom Line Compliance

This month, FIRE Solutions is featuring a free article, The Perfect Financial Storm, on its website. Get a bird’s eye view of the cause of the storm and the debris it left behind. You’ll come away with a thorough understanding of how so many financial factions can be interconnected through clear explanations, pertinent examples, and insightful conclusions. Topic highlights include: Step-by-step review of the 2008 financial crisis

  • Creation of the housing bubble
  • Inflated ratings mislead
  • The high price of excessive leverage
  • The mark-to-market debate
  • Credit markets’ freeze
  • Speculators, hedge funds, and shorts
  • SEC bans short selling of financials
  • Rescues and forced mergers
  • Worldwide restructuring and recapitalization
  • Strategic actions at home and abroad
  • New reform proposals
  • What’s in store for the future

The article is followed by a section entitled, “Bottom-line Compliance for 2009.” This section outlines some of the compliance issues that are now at the forefront of the regulators’ sights as a result of the 2008 financial crisis. This section also focuses on areas that will need an extra measure of surveillance, and methods to improve complaint-prevention efforts.

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