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Dave Banerjee CPA

Dave Banerjee CPA – Elected to FINRA District 2

Thank you for your support in electing Dave for FINRA District Committee

Dave Banerjee CPADave Banerjee 2017-2019 FINRA District 2 committee member

Personal statement from Dave 

” I am truly honored to have been elected to the FINRA district 2 committee small firm seat that opens January 2017. My focus is to ease the regulatory oversight crisis faced by FINRA small firm members. I welcome discussion with fellow member firms in achieving this objective and hearing other industry concerns as well.” 

In coming weeks Dave will be participating in various orientation calls and discussion with committee member colleagues. He welcomes discussion with D2 members. As a compliance and regulatory principal to small and mid-sized firms since 1984, Dave has experienced the rise and fall of various financial crisis. Presently the burden on small to mid-size broker-dealer firms by regulatory authorities is in crisis. There is a steady decline of applications for new member broker-dealer firms,and withdrawals have increased. Ever-changing regulatory rules and overwhelming recordkeeping requirements placed on smaller brokers is taking a toll. 

More recently, the rise of FinTech, Robo-advisors, and Regtech firms pose new threats to traditional BD’s, and bring formerly unheard of risks. Dave’s knowledge in Engineering, Technology, and Compliance gives him a unique advantage to understanding emerging technology and its impact on the industry and firms. Dave has the ability to develop solutions for small firms and understands the value of emerging technology.

Dave welcomes an opportunity to hear your concerns directly and work with member firms in developing strategy to tackle the high pressure points. Being elected to the District Committee is an opportunity to participate in regulatory initiatives and carry the message of small firms.  Feel free to share your insight, thoughts, and concerns using LinkedIn, Skype, Email, or Phone. 

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Dave Banerjee CPA

Dave Banerjee – FINRA District 2 Committee Member

Meet Dave Banerjee CPA   Dave Banerjee

CEO l Consultant l Speaker 

FINRA District 2 – small firm seat

Serving with FINRA is a unique opportunity to influence regulatory policy. Working with so many clients who are subject to regulatory guidelines, I am honored to have the opportunity of speaking for broker dealer firms burdened by overwhelming pressure by compliance oversight through my election to FINRA small firm committee 2017 through 2019. 

 

Personal statement from Dave.  “I understand and recognize the challenges faced by FINRA small firm members and I believe strongly that there is a better way to provide quantifiable results.”

As a compliance and regulatory principal to small and mid-sized firms, Dave has unique insight of the burden placed on smaller broker-dealer firms by regulatory authorities and SEC concerns executed by FINRA (a dual perspective). In recent years Dave has noted the steady decline in applications for new member broker-dealer firms, and an increase in withdrawals. He recognizes the reason for this, in part, is due to the ever-changing regulatory burdens placed on smaller brokers. Dave agrees with others who say, “Current registration and filing requirements have a tremendous impact on a small firms’ ability to invest in building the business. In today’s regulatory landscape there is an undeniable crisis among small broker dealer firms.”

Dave’s Candidate Profile –

 

Speak with Dave Banerjee by phone or contact us below

Office: (818) 657-0288  

Download Candidate Profile

Read more about Dave Banerjee’s qualifications


 

Professional Qualification Highlights

Core Competencies: 

  • Licensed series: 4, 7, 24, 27, 53, 55, 63, 65, 79, 99
  • Member PCAOB, AICPA, NSCP
  • FINRA registered since 1984
  • Mock Audits
  • Compliance Controls
  • FINRA SEC Exams
  • Compliance Outsourcing Specialist

Areas of Expertise:

  • Regulatory Compliance
  • Audits & Exams
  • CyberSecurity Plans
  • Risk Management
  • Tax Compliance & Planning
  • Foreign Investments

About Dave

Dave Banerjee, CPA is a Co-founder and the CEO of RND Resources, Inc. Under Dave’s leadership, RND Resources, Inc. has provided customized compliance consulting, risk assessments, audit services, accounting, registration and PCAOB services to broker dealers, registered investment advisors, hedge funds, commodity trading advisors, commodity pool operators, futures commission merchants, banks, wealth managers, and insurance companies since 1984.

Dave conducts webinars, seminars, on-site consulting & training, and is frequently asked to participate in  public speaking engagements.  Recent panel speaking commitment includes the NSCP National Conference.

Download Dave’s Bio and Speaker media kit

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FINRA new rules

May 2015 – Increasing FINRA Sanction Guidelines

FINRA is stepping up its position on sanctions with recommendations for stricter guidelines.  What reasons do they have?FINRA new rules

The regulatory mission of FINRA is to protect investors and strengthen market integrity through self-regulation. By emphasizing self regulation, FINRA infuses balance into the regulatory process. But, what is a regulatory authority to do when firms continue to engage in reckless and intentional misconduct? Impose stronger sanctions.

Increased punishment is key to how FINRA plans to deal with firms that continually miss the mark in reporting and compliance requirements. The 2015 stance is that sanctions should be “significant enough to achieve deterrence, and not a mere cost of doing business.”  Is your firm prepared to deal with the complex rules and increased cost of fines?

FINRA has published the Sanction Guidelines so members, associated persons, and counsel can become familiar with the types of disciplinary actions that may be applicable to various cases. The guidelines are not intended to be absolute, but are intended to provide direction for imposing fines. The guidelines infer that firms may fall above or below standard guidelines in their failure to procedures, and that sanctions should be applied fairly based on aggravating or mitigating factors.

Aggravating factors can include:

  • Prior disciplinary actions
  • A pattern of misconduct
  • Ignoring red flags and warnings from regulators
  • Attempts to delay FINRA’s investigation, or conceal or mislead

 

While, mitigating factors may include:

  • Accepting of responsibility
  • Substantially assisting  FINRA in its investigation
  • Demonstrating the misconduct was not typical of the firm’s compliance history
  • Reasonable reliance on competent legal or accounting advice

Read new FINRA Guidelines here

 

See the Guidelines

Outside Business Activities

Failure to Honor Arbitration Award

Distributions of Securities

Financial and Operational Practices

Impeding Regulatory Investigations

Improper Use of Funds or Forgery

Qualification and Membership

Quality of Markets

Reporting of Information

Sales Practices

Supervision

FINRA Video Update Apr 2015

Approved Changes to Public Communications Rules

FINRA Board approves of proposed amendments to Communications with the Public Rules 2210, including changes to Rule 2214 (Requirements for the Use Investment Tools Analysis) and Rule 2213 (Requirements for the Use of Bond Mutual Fund Volatility Ratings).

FINRA Video Update Apr 2015Thursday April 16, 2015 – FINRA Video Update and letter from the Chairman and CEO addresses the approval. The proposed amendments would eliminate certain filing requirements that are low-level risk to investors. According to Jack Brennan, changes to requirements include removing the filings requirement of Shareholder reports, because they are already filed with the SEC. Additionally they are looking at removing requirements for filing reports when discussing investment companies generically, and communications discussing investment analysis tools.

In the April 2015 Board Update Video, Jack Brennan goes on to explain that FINRA is making an effort toward modernizing rules, especially where there is low-level risk. The changes are intended to better align investor protection with economic impact.

 

Rule 2213 – Requirements for the Use of Bond Mutual Fund Volatility Ratings | FINRA proposes to narrow and refine the scope of disclosures required under Rule 2213.

 

Rule 2214 – Requirements for the Use of Investment Analysis Tools | Rule 2214 is proposed to be affected with regards to retail communication requirements.

These are the first set of rule changes to the Communications with the Public Rules as a result of FINRA’s retrospective rule review program launched April 2014. FINRA will issue a regulatory notice in coming months seeking public comment on the proposed changes. Stay tuned.

Read the Letter from Richard Ketchum dated April 16, 2015

SEC and FINRA 2015 Exam Priorities

SEC and FINRA have recently announced the priorities for their 2015 examination programs.  The priorities are divided into 4 categories:  a) retail investors; b) market wide risks; c) data analytics; and d) other areas.

Retail investors: In consideration of recent industry trends, including the fact that registrants are developing and offering to retail investors a variety of new retirement products and services, the program will focus on 4 key areas that tend to center on retirement accounts:

  • Fee arrangements:  The program will focus on recommendations regarding account types and if they are in the best interest of clients, including the fees charged and the risks.
  • Sales practices:  The focus will be on the sales approach used regarding the movement of retirement assets from employer plans to individual accounts, including the fees charged and the risks.
  • Suitability: The staff will focus on recommendations and determinations to invest retirement assets into complex or structured products and higher yield securities including due diligence conducted, disclosures made and the suitability of recommendations.
  • Branch offices: In this area the staff will focus on supervision issues and use its analytics to assess deviations from compliance practices.

Market-wide risks: Focus will be on structural risks and trends that can impact multiple firms or an entire industry. Areas of focus include:

  • Large firms: In conjunction with Trading and Markets the program will focus on the largest broker-dealers and asset managers to assess risk at individual firms and across industries.
  • Clearing agencies: All agencies assessed as systemically important will be examined using a risk based approach.
  • Cybersecurity: Building on an initiative started last year, the program will focus on compliance and controls.

 

  • Execution: The program will focus on potential conflicts involving payments or credits for order-flow and the duty of best execution.

Data analytics: Enhanced analytics will be used to assess the potential to engage in fraudulent and/or other potentially illegal activity including:

  • Recidivists: This involves the identifications of those with a record of misconduct.
  • Microcap fraud: Identification of brokers and transfer agents that may be involved with microcap fraud such as market manipulations. Enforcement also has a microcap fraud task force which focuses on these areas.
  • Excessive trading: The focus here is on clearing and introducing brokers to identify excessive trading. This complements the retail issues listed above.
  • AML: This will focus on clearing and introducing brokers that have not filed SARs or have filed reports which are incomplete and brokers who permit deposits of cash or direct access to the markets.

Other areas: Other priorities for the Division include municipal advisers, proxy services, never before examined investment companies, fees and expenses in private equity and transfer agents.

FINRA: Will focus on the sale and supervision of interest rate sensitive and complex products, transactions centered on wealth events for investors and cybersecurity, including platforms that interact with the markets. In addition, FINRA identified the following five broad areas of focus:

  • The alignment of firm and customer interests;
  • Standards of ethical behavior;
  • The development of strong management and supervisory systems;
  • The development and marketing of novel products and services; and
  • The management of conflicts of interest.

For further information please feel free to contact our office at  (818) 657-0288.

FINRA’s 2015 Priorities Letter – highly sensitive products

According to FINRA’s 2015 Regulatory and Examination Priorities Letter “FINRA examiners will look for concentrated positions in products that are highly sensitive to interest rates—such as long duration fixed income securities, high yield bonds, mortgage-backed securities, or bond funds composed of interest rate-sensitive securities—and test for suitability and adequate disclosures. Examiners may also review firms’ efforts to educate registered representatives and customers about such products”

If this is an area of concern for your firm, please feel free to give us a call at (818) 657-0288 for a consultation.

 

 

FINRA Considers Stricter Reforms for Arbitration

The FINRA arbitration system is a valuable part of the regulatory process, giving clients and brokers a way to settle disputes without the hassle of going to court. However, the current rules for the process have been criticized for being a bit misleading to investors. Consequently, FINRA is now considering stricter rules for choosing who can serve as an arbitrator.    Read more

The Upcoming SEC and FINRA Cybersecurity Sweeps. Is Your Firm Ready?

Because of all of the sensitive financial information that RIA’s, Broker Dealers and Banks keep regarding their clients, internet security has become a major concern for the wealth management industry. As, hacking techniques are growing more sophisticated, it is hard to tell who could be observing your connection and Internet activity. Due to this cyber-threat the SEC and FINRA will be conducting cybersecurity sweeps of the wealth management industry to make sure you are up to date and taking the latest precautions to protect your clients.

Why Hackers Target RIAs and Financial Firms

Bank account numbers and social security numbers are not the only thing hackers are looking to steal. Many hackers and rogue traders are hijacking trading accounts from financial firms and making unauthorized trades, as well as stealing funds.

How the SEC and FINRA Cybersecurity Sweeps Will Work

The SEC and FINRA are aware of these potential security threats and want the industry to get prepared. They have announced that this year they are planning random sweeps to test the defenses of various firms. If a firm’s cybersecurity is not up to the job, the SEC and FINRA could levy large fines as punishment for the oversight.

The SEC and FINRA will also be checking to see that firms have adequate written policies and measures for cybersecurity, a schedule of periodic tests for weaknesses in the system, and a history of fixing weaknesses in their cybersecurity. If your firm fails in any of these categories, you could be liable for a large fine.

What Your Firm Needs to Do to Prepare

The SEC and FINRA cybersecurity requirements are fairly exhaustive and could catch many firms off guard, especially smaller firms that might not have full-time tech support. If you are worried that you may have a security gap, you could try working with a third party that specializes in this type of compliance. These firms have studied the upcoming requirements and can you give a checklist of the measure you need in place in case of a sweep.

We encourage you to join our free webinar, entitled “Cybersecurity for Financial Services Firms” on July 9th where we will be discussing the procedures you need to get ready. Preparing for the SEC and FINRA cybersecurity sweeps will take some work, but it’s a fraction of the headache of dealing with a serious breach.

Reserve your Webinar seat now at:  https://www1.gotomeeting.com/register/274214880

 

Beware of Bitcoin? Regulators Issue Warnings for Investors

Bitcoin is one of the hottest investment stories right now. Over the past few years, this new type of digital currency has exploded in value and caught the attention of investors across the World. However, the excitement behind Bitcoin’s gains might also be masking some serious issues. The SEC and FINRA have both released fairly strong warnings for people considering buying Bitcoins.    Read more