Regulatory Groups Gear Up Remote Exam Requirements

• Parties will receive a random list of 10 national mediators along with their Mediator Disclosures for their consideration and ranking;

• The mediator payment for his/her service is $100 an hour split by the parties; and

• FINRA waives mediation filing fees and administrative fees (FINRA receives no revenue).

FINRA Dispute Resolution Services also offers virtual hearing services (via Zoom and teleconference) to parties in all cases by joint agreement of parties and mediator.

FINRA Task Force Catches Scams

FINRA's National Fraud and Financial Crimes Detection Programs, part of the broker-dealer regulator's newly established COVID-19 Fraud Task Force, has referred more than 50 potentially fraudulent COVID-19 scams by public companies to the SEC.

The referrals have provided direct assistance to the SEC in suspending trading in the shares of more than 20 public companies, FINRA said in early May.

On March 23, FINRA hired Greg Ruppert, the former head of Charles Schwab's Financial Crimes Risk Management group, to head the NCFC, which provides surveillance, investigations and examinations of potential fraud associated with the coronavirus pandemic.

Ruppert — who also was a special agent with the FBI for 17 years, investigating complex financial schemes, terrorist financing and cyber threats — has assembled a task force of 15 FINRA groups to monitor COVID-19 related frauds.

Members of the task force collaborate daily and share regulatory intelligence with the SEC's COVID-19 Fraud and Insider Trading task forces as well as with the FBI and the North American Securities Administrators Association.

The NCFC's Insider Trading and Fraud Surveillance teams recently identified suspected COVID-19 fraud activity at select firms. "This regulatory intelligence was shared with NCFC's AML and Cause Exam teams as well as with FINRA's Enforcement Department which, collectively, reviewed the information and opened exams and investigations," FINRA said in the blog.

FINRA also warned broker-dealers in early May of phishing emails that purport to be from the self-regulator.

In Regulatory Notice 20-12, FINRA states that the scam is "a widespread, ongoing phishing campaign that involves fraudulent emails" that claim to be from FINRA officers, including Bill Wollman and Josh Drobnyk.

The emails have a source domain name "@broker-finra.org" and request immediate attention to an attachment relating to a broker-dealer firm.

The domain of broker-finra.org is not connected to FINRA and firms should delete all emails originating from this domain name, FINRA states. finra.org.

Washington Bureau Chief Melanie Waddell can be reached at [email protected].