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The assumption by the Financial Industry Regulatory Authority of marketplace regulation for NYSE Euronext’s U.S. trading venues is a main step toward establishing market oversight and safeguarding investors, according to Rick Ketchum, chairman and CEO of FINRA.

Under the strategy, announced May 4, FINRA—which currently conducts market surveillance for the NASDAQ Stock Market and buying and selling occurring off-exchange—will be responsible for aggregating and regulating approximately 80 percent of trades in equities made at U.S. market centers.

Speaking at a May 20 Senate subcommittee hearing examining the causes and lessons of the Might 6 marketplace plunge, Ketchum said that the benefits of the move for marketplace integrity and investor safety are “profound.”

But much more importantly, he said, “empowering a single set of eyes to oversee the majority of transactions will facilitate the required progress toward a truly holistic method to regulation that addresses the realities of today’s marketplace.”

Ketchum also said that technological advances in trading systems, coupled with marketplace fragmentation, have led to a scenario exactly where thorough inter-market surveillance is important to ensuring the general integrity of the equity markets.

“The major hurdles of just a few many years ago to consolidated market surveillance are already significantly decreased due to the progression of market structure and the convergence of numerous elements of exchanges’ company models,” he mentioned. “With the alterations to market structure resulting from Regulation NMS

May 5 (Bloomberg) — Goldman Sachs Group Inc. was late in notifying the Financial Industry Regulatory Authority that trader Fabrice Tourre may be sued for fraud by the U.S. Securities and Exchange Commission, according to people familiar with the matter.

Goldman Sachs didn’t update Finra on Tourre’s status till this week, much more than two weeks after the SEC filed a lawsuit against him and the firm for allegedly misleading investors about a mortgage-linked security, the individuals said. Under Finra’s rules, Goldman Sachs should have updated Tourre’s file within 30 days of his receiving a so-called Wells notice from the SEC last year.

Penalties for failing to update Finra can consist of censure, fines, suspension or expulsion in the brokerage business. In 2004, Finra’s predecessor organization, the National Association of Securities Dealers, fined 29 firms much more than $9.2 million for much more than 8,000 late disclosures of reportable information about their brokers and prohibited two firms, Morgan Stanley and Wachovia, from registering new brokers for five company days.

Goldman Sachs and Tourre are contesting the SEC’s suit.

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May 4 (Bloomberg) — The Financial Industry Regulatory Authority will take more than surveillance of NYSE Euronext’s U.S. exchanges and duty for policing buying and selling violations as part of the additional consolidation of market oversight.

The industry-funded brokerage regulator will monitor the stock and equity derivatives markets at the New York Stock Trade, NYSE Arca and NYSE Amex, Washington-based Finra and NYSE Euronext said inside a news release these days. The accord must be approved through the Securities and Trade Commission.

“You need a full view with the world,” mentioned Richard Ketchum, chief executive officer of Finra, “when you are worried about manipulation, insider buying and selling, a variety of abusive actions.” Someone trying to manipulate markets can submit orders and trade in multiple venues because “the equity markets are very fragmented,” while oversight is currently limited to person exchanges, he said in an interview.

Growing automation and competition have reduced the Large Board and Nasdaq’s volume in securities they list from as a lot as 80 percent within the last decade. Now, two-thirds of trading in their companies requires location off their networks simply because orders are dispersed throughout dozens of competing venues. The move by Finra and NYSE is definitely an make an effort to bring oversight of a big segment of that into a single organization.

Finra is presently focused on equities oversight. Options “would adhere to following that,” said Steve Luparello, vice chairman of Finra. The objective is for surveillance to become consolidated very first inside every asset class, and then across equities and options, to provide a “true picture of the market,” he said.

Surveillance Throughout Markets

“This agreement will strengthen market regulation by consolidating surveillance and enforcement responsibilities throughout several markets,” NYSE Euronext Chief Operating Officer Lawrence Leibowitz mentioned inside a statement. “Today, trading is dispersed among several venues and no one regulator has responsibility for monitoring information and pursuing action.”

Employee Transfer

The agreement between Finra and NYSE Euronext involves about 225 employees, the “significant majority” of whom is going to be transferred to Finra in June, according to Ketchum. The consolidation is expected to be total before July, Finra and NYSE Euronext said, at which point Finra will oversee 75 % to 80 % of U.S. equity markets by volume. NYSE Euronext will pay Finra to oversee its exchanges.

Conducting oversight throughout a minimum of 75 percent with the marketplace “is way better than 20 or 50 %, but it’s not 100 %,” Ketchum mentioned. Finra is seeking to expand the quantity of markets it monitors. “We’re the logical entity to complete consolidated surveillance,” Ketchum said.

Finra plans to move the companies it oversees to a single audit trail for equity securities, Ketchum mentioned. The program in place for Nasdaq-listed securities, known as the Purchase Audit Trail System, may be the “logical” selection for just one unified program for all stocks, he said. Firms that presently use the NYSE Purchase Tracking Program for stocks listed on that exchange would have to adopt the one utilized for Nasdaq. Efforts are already under way for at least a year to combine the two systems.

Improving Oversight

Finra also wants non-member brokers to join and enhance its oversight over more marketplace participants, Ketchum mentioned. Finra plans to examine the trading activity fee it imposes on brokers, which has deterred some firms from joining. All brokers should be registered with the SEC and a self-regulatory organization such as an exchange, whilst individuals dealing with clients should be Finra members too.

“It’s much better for active participants within the market to become Finra members,” Ketchum said. The TAF fee has a “disproportionate impact” on proprietary buying and selling firms and Finra is “going to consider a difficult look at that,” he mentioned.

Additionally to exchanges, Finra operates two facilities that report transactions occurring away from public markets. One is run in conjunction with Nasdaq and also the other with NYSE. Brokers such as market makers and dark pools, which trade stocks without having displaying quote info publicly, record their transactions off exchanges to these entities, giving Finra info about that activity.

History on Consolidation

NYSE and Finra began discussing consolidating their surveillance business in 2007 when Ketchum was CEO of NYSE Regulation, the oversight arm at the trade operator, and Finra was still called NASD. Discussion about how to implement an arrangement started “earlier in 2009,” he said. Ketchum joined Finra in March 2009 after then-CEO Mary Schapiro became chairman with the SEC.

Finra was produced via the 2007 combination with the NASD and most of the New York Stock Exchange’s regulatory unit. Since the merger, Finra has had duty for policing trading on Nasdaq along with other markets, overseeing rules for broker-dealers and ensuring that member companies sell clients appropriate investments. NYSE along with other exchanges will maintain regulatory staff to oversee member companies and buying and selling on their venues.

“Each market has its own needs and some surveillance is usually local,” Ketchum mentioned.

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Betterment a new startup that’s launching today at TechCrunch Disrupt, is seeking to turn out to be the “replacement for the savings account” — it earns you much more money than a standard savings account whilst providing more flexibility than you’d get from greater yield accounts. And, in contrast to most monetary providers, Betterment is created so that anyone can use it, regardless of their knowledge about the marketplace and monetary items.

The site has established two portfolios, a single of which consists of numerous stocks and another of ‘ultra-safe’ bonds. Following linking your bank account with the support you use a slider to adjust just how much risk you would like to take, which determines just how much money is allocated into every portfolio. The site cuts out as many actions as feasible — as soon as you’ve set in your cash and determined how you would like to split your cash between the stock marketplace and bonds, you’re basically done (at least if you would like to be).

You will find plenty of other options for users who want to complete a deeper dive. If you would like guidance on how to figure out this allocation, you can look at what your peers have carried out. There’s an interface to adjust age ranges, earnings variety, and so on — and it shows you how risky other individuals inside a comparable scenario are. An analysis section allows you to watch percent returns more than time, or the dollar alterations inside your accounts, and your account balance.

The site may be dealing with financial information, but like TC50 winner Mint, Betterment has clearly set a great deal of time into making its graphs appear slick and attractive,

Betterment charges a 0.9% fee. The company is registered with FINRA and also the SEC — they’ve built their own monetary infrastructure for the service (it isn’t just a nice frontend on a different expense platform).

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Whilst the economy might be showing signs of life and company activity is picking up, there are nevertheless thousands of Oklahoma businesses that are strapped for money. For many, the objective was to get via 2009 and they succeeded. Unfortunately, the reality of 2010 is not much much better for cash poor companies. Forbes magazine lately ran an post about dealing with creditors, written by Marc Kramer, president of Kramer Communications, author of 5 books and instructor at the Wharton School at the University of Pennsylvania and also the National University of Singapore. The typical theme using the author’s guidance and with numerous of our restructuring engagements is the same – develop a clear, credible and actionable strategy. Then clearly communicate and implement the plan.

Extracts of Marc Kramer’s post are reproduced beneath:

Deal with suppliers as your bankers for as well lengthy plus they have a tendency to obtain hot under the collar. But what should you just do not have the money at the moment?

Don’t stick your head within the sand: Vendors, lenders and taxing authorities do not just go away. You need to deal with them–promptly. Absolutely nothing less than your corporate and individual credit profile–as nicely as your reputation within and without having the company–are at stake.

Employees who offer with suppliers are usually the first to hear that the suppliers haven’t been paid. Red-faced, the workers begin to fret concerning the wellness of their employer. The best begin dusting off their resumes. Meanwhile, your vendors begin flapping their mouths about your delinquency to your competitors, who prepare to move in for that kill.

Head off this calamity. The game strategy:

Step One: Depending on the size of your organization, call for a meeting of all the employees or just the best managers and explain to them your company’s present financial situation. Allow them know how and when it will be resolved. Have employees forward all supplier questions to bookkeeping, accounting, their superior or somebody who can answer for the organization inside a meaningful way.

Action Two: Contact the taxing authorities; in my experience, if they trust you, they tend to be more than willing to function with you.

Action Three: Set up an in-person meeting with your loan officer. The last thing he would like would be to put you out of business–after all, the bank would like its cash back. Just make sure to come ready with a payment plan.

Action Four: Inform your vendors about your financial situation, via a letter or e-mail. Provide to meet with them in individual or by telephone. Articulate a defensible strategy (seeing a theme here?) to make them complete.

Step 5: Get in touch with your clients by phone and let them know what’s happening. They realize that everybody goes through difficult times. The last thing you want is for them to find out from a competitor.

Your willingness to deal with challenges says a great deal about your firm and its leadership.

Be honest, act early.

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CHICAGO, Might 24 /PRNewswire/ — Even as interpersonal media platforms like blogging, Facebook, Twitter and LinkedIn encounter phenomenal growth on a global scale, monetary providers experts are creating their personal strides at tapping into their networking energy – despite oft-cited concerns more than running afoul of FINRA regulations more than allowable communications.

Most of the respondents (82 percent) to some current “spot” survey by Horizon Money Management were a minimum of somewhat familiar with interpersonal media; 55 % using them both professionally as well as personally.

The survey base included hedge fund managers, monetary services providers, managed futures funds experts and other investors or brokers. Horizon Money Management is a Chicago-based provider of independent asset management services to institutional investors.

The respondents supplied information on their familiarity with interpersonal media and how they’re utilized, professionally and personally. Among the findings:

* LinkedIn is the most popular, cited by 84 percent of respondents. Facebook (64 percent), Skype (44 percent), Twitter (33 percent) and YouTube (29 percent) were the following most-popular interpersonal media websites, along with blogging (22 percent).
* Sixty percent said they make use of social media to collect company information or intelligence about the expert side; 75 percent who use it for personal purposes mentioned they do so to remain in touch with friends or family.
* Of those presently using social media, the majority (61 %) expect to expand their usage more than the following 12 months. Of those who presently do not use interpersonal media, the majority (80 %) have no plans to change that status within the following year.

“With financial companies thinking about new policies regarding the use of social media tools within the workplace, it is going to be fascinating to see how these actions might affect what clearly is a familiar concept for a majority of individuals inside the industry,” said Pauline Modjeski, president of Horizon Cash Management.

MIAMI, FL, Might 20, 2010 (MARKETWIRE via COMTEX) — Atlantis Technologies Group (PINKSHEETS: ATNP) submits info to FINRA to open an investigation concerning the every day short volume because of the new approved SEC brief promoting guideline (http://www.sec.gov/rules/final/2010/34-61595.pdf).

In the SEC Rule that came into impact 60 days following February 24, 2010, “We are adopting a brief sale-related circuit breaker that, if triggered, will impose a restriction on the prices at which securities may be sold short (‘short sale price test’ or ‘short sale cost test restriction’). Particularly, the Guideline demands that a trading center establish, sustain, and enforce written policies and procedures reasonably designed to avoid the execution or display of a short sale order of the included protection at a cost that’s much less than or equal to the present national best bid if the cost of that covered security decreases by 10% or much more from the included security’s closing cost as determined through the listing market for the covered protection as from the end of regular trading hours about the prior day.”

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This matter is prior to the Court on plaintiffs’ motion for a preliminary injunction and their request to get a hearing. Defendant Stifel, Nicolaus & Company (“Stifel”) opposes the motion and the issues are fully briefed.

Plaintiffs seek an injunction preventing Stifel from proceeding against plaintiff Kenneth Thompson in a pending Financial Industry Regulatory Authority (“FINRA”) arbitration. In support, plaintiffs state that there is a “risk of inconsistent and conflicting adjudications” if the arbitration goes forward while this case is pending, and that plaintiff Thompson will be irreparably harmed. In response, defendant submits evidence showing that Thompson initiated the arbitration and agreed to be bound by the panel’s interpretation and application of the FINRA Code of Arbitration and by the panel’s decision. Additionally, Thompson requested that the panel dismiss his arbitration so that he could pursue the court litigation, but his request was denied. Defendant adds that it has incurred more than $30,000 in attorney fees in connection with the arbitration proceedings.

In considering whether to issue a preliminary injunction, the court weighs the following four factors: (1) the threat of irreparable harm to the movant; (2) the state of the balance between the harm and the injury that granting the injunction will inflict on other parties; (3) the probability that it will succeed on the merits; and (4) the public interest. Calvin Klein Cosmetics Corp. v. Lenox Laboratories, Inc., 815 F.2d 500, 503 (8th Cir. 1987)(citing Dataphase Systems, Inc. v. C L Systems, Inc., 640 F.2d 109 (8th Cir. 1981)). Plaintiffs have failed to show that any of these factors weigh in favor of granting the preliminary injunction. Other than a conclusory statement that Thompson would suffer irreparable harm, plaintiffs omit any discussion of the relevant Dataphase factors. Further, plaintiffs have failed to provide any legal support for their request to stay the arbitration in light of Thompson’s agreement to be bound by the panel’s decision. For these reasons, plaintiff’s motion to get a preliminary injunction must be denied.

In its response to plaintiffs’ motion, defendant asks that the Court remove plaintiff Thompson from the putative class. A memorandum in opposition to a motion is not the proper vehicle for what amounts to a request to dismiss a plaintiff’s claim. The defendant may present its request in a separate motion to which Thompson will have the opportunity to respond.

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The Securities and Exchange Commission and the Monetary Industry Regulatory Authority (FINRA) are proposing a new circuit-breaker rule that would halt trading in person stocks in the S&P 500 if share prices move 10% or more in a five-minute period.

The SEC and FINRA announced the proposed rule on Tuesday afternoon after the market close. The SEC noted that on May 6, the day of the so-called “flash crash,” when the Dow Jones Industrial Average dropped nearly 1,000 points in a matter of minutes, 30 stocks in the S&P 500 fell by at least 10% in five minutes.

A trading pause would give markets an opportunity to attract new trading interest in an affected stock, establish a reasonable market price, and resume trading in a fair and orderly fashion, the SEC said.

The new rules will be in effect on a pilot basis through Dec. 10. The plan is to expand the rule to securities beyond the S&P 500, including exchange-traded funds, as soon as practicable, the SEC said.

The proposed rule reflects the consensus recommendation of the SEC, FINRA and also the stock exchanges, based on a meeting that was held last Monday in Washington.

“We continue to believe that the market disruption of May 6 was exacerbated by disparate trading rules and conventions across the exchanges,” said SEC Chairman Mary Schapiro within the statement. “As such, I believe it is important that all the exchanges quickly reached consensus on a set of uniform circuit breakers that would be triggered when needed.”

The SEC staff will continue to work with the markets to consider revising market-wide circuit breakers that currently exist, but none of which were triggered on May 6. These circuit breakers apply across all equity trading venues and also the futures markets.

A 10-day comment period on the proposed rule will begin Tuesday.

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The Financial Business Regulatory Authority Inc. says that a brokerage firm that recently shut down committed securities fraud.

MICG Investment Management LLC of Newport News, Va., perpetrated a fraud in the management of a proprietary hedge fund, according to the regulator. Finra also filed a complaint against the organization for allegedly misusing investors’ funds and causing false account statements to become issued to investors. Facing the same allegations: Jeffrey A. Martinovich, the firm’s chief executive and majority owner.

At its height, MICG had about 40 independent reps and advisers, sources mentioned.

Finra filed the internal administrative proceeding with its office of hearing officers on Might 14. Two days previously, MICG closed its doors when the firm failed to meet its net capital requirement.

The hedge fund — MICG Venture Strategies LLC — was organized and managed by MICG and Mr. Martinovich, based on the lawsuit.

Finra’s complaint also charges that MICG and Mr. Martinovich improperly assigned excessive asset values to two non-public securities owned by the hedge fund, after which utilized the excessive asset values as the basis for paying unjustified management and incentive overall performance fees. Mr. Martinovich was also charged with fraudulently inducing an elderly, non-accredited MICG client to invest $75,000 within the hedge fund,

According to the Finra complaint, the ginned-up assets included 1.8 million shares of common stock in EVP Solar Inc., a private organization. The fund initially valued the stock at about $1.15 per share, but Finra claims that MICG and Mr. Martinovich boosted the value of the shares to $2.13 — six months after purchasing the stock. Mr. Martinovich and MICG received a management fee of $337,000 from the hedge fund.

Finra claims the other overvalued investment was a stake inside a soccer club, Derby County FC, which plays within the second tier of England’s expert league. Mr. Martinovich allegedly sent an e-mail to staff members in December 2008 instructing them to change the value of the hedge fund’s interest in the shares from the club to $7.6 million. Finra claims MICG had bought the shares about a year earlier for $5 million.

Mr. Martinovich could not be reached to comment. But in a statement in March on his public record with Finra’s BrokerCheck program, he mentioned that “MICG vehemently denies all allegations” in Finra’s initial investigation.