Matt Farley, of counsel to the New York office, was quoted in Reuters in an article on one Wall Street broker’s response to a request from the Financial Industry Regulatory Authority (FINRA) to hand over certain details about a consulting business he operates.
The broker, Gregory Evan Goldstein, in a recent proceeding before the U.S. Securities and Exchange Commission, argued that details about the business, a third party that FINRA does not regulate, should be off-limits. Goldstein was suspended from the industry as of February 15, and will eventually be barred and fined $50,000 if he continues to ignore FINRA's requests.
FINRA has the authority to request a broad range of information from brokers, including businesses they may run on the side, in its effort to ensure they are complying with industry rules and to prevent potential wrongdoing.
"I'd never tell FINRA, 'You can't have it,'" said Matt. That is especially true when the activities are related to money or investments, where customers could be at risk, he added.
While failing to respond to FINRA information requests is not a widespread practice among brokers, such cases typically end with suspensions or bars.
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