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Jacko Law Group Blog

FINRA Enhances BrokerCheck Capabilities

Enhancements to make FINRA’s BrokerCheck and Investment Advisor Public Disclosure (IAPD) systems more user-friendly went live last week. FINRA’s press release announcing the changes notes that they were implemented to ease investors’ access to information concerning brokers, investment advisers and their firms. Many of the improvements address recommendations from a 2011 SEC report, mandated by Dodd-Frank, which outlined ways to improve investor access to information about financial professionals. Through the updated system, investors can now:

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Reuters Releases Report Detailing HSBC’s Deficient Policing of Money Laundering Risks

Earlier this month Reuters issued a special report detailing confidential documents from investigations by two U.S. Attorney offices into violations by HSBC of the Bank Secrecy Act and other anti-money laundering laws.

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New York High Court Rejects Unlawful Termination Claim by Hedge Fund Compliance Officer

On Wednesday, New York’s highest court rejected a claim by the former Chief Compliance Officer of Peconic Partners, LLC – a New York based hedge fund – that he was wrongfully terminated for confronting the fund’s majority owner, CEO and President, William Harnisch, for front-running. Sullivan v. Harnisch, et al., No. 82, NYLJ 1202552974182, at *1 (Ct. of App., Decided May 8, 2012). The complaint filed by the CCO, Joseph Sullivan, alleges he was terminated within days of objecting to sales by Harnisch in his personal account and the accounts of his family members in Potash Corp. (POT) the day before selling shares of the stock in the hedge fund’s accounts. The court noted that Sullivan, as CCO, had a duty to ensure that Peconic followed its legal and ethical obligation under state and federal securities laws, as well as its own Code of Ethics, to avoid such conduct. Notably, the court found that those “legal and ethical duties of a securities firm and its compliance officer [do not justify the recognition] of a cause of action for damages when the compliance officer is fired for objecting to misconduct.” An important factor in the reaching this decision seemed to be the fact that Sullivan was not a full-time compliance officer; rather, he held four other titles at the firm, including Executive Vice President and Chief Operating Officer.

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