Archive for October, 2014

Bernstein on Cybersecurity with @finplan @PaulHechinger

Monday, October 20th, 2014

Securities lawyer Daniel Bernstein says that while there really aren’t any specific compliance regulations about cybersecurity, advisors can seek guidance from closely-related rules that are already in place. Bernstein, director of research and development at the regulatory financial consulting firm MarketCounsel, says advisors should look to the SEC’s Regulation S-P, which is aimed at protecting consumer financial information by requiring notice of privacy policies and by preventing the disclosure of personal information to third parties.

Most states have also adopted their own data protection programs, and many of those regulations address cybercrime related issues. “Those regulations are in place regardless of whether you’re SEC or state-registered,” says Bernstein. “It’s for anyone who has a client in that state.” He recommends looking at Massachusetts’ law, which is known for its detail in outlining preventive measures.

It’s usually easier for larger firms, with large IT departments, or even their own security experts, to keep up to date with security issues, but it’s essential that advisories of all sizes do their due diligence. Bernstein says that he sees most non-compliance penalties around regulation S-P when an advisor or broker fails to keep client information secure. Often, the infraction results in a deficiency letter, which isn’t made public, he says, while fines occur more often when client data is actually stolen. The biggest problem occurs when the advisor should have known or could have stopped the theft of a client’s information or money. In addition to legal liability and damaged reputation, advisors are likely to face regulatory penalties. “If you should have known that your client information was at risk, and you didn’t do anything to stop it, they’ll find a rule to fit that into,” says Bernstein.

Read more.

Bernstein on Cybersecurity with @finplan @PaulHechinger

Monday, October 20th, 2014

Securities lawyer Daniel Bernstein says that while there really aren’t any specific compliance regulations about cybersecurity, advisors can seek guidance from closely-related rules that are already in place. Bernstein, director of research and development at the regulatory financial consulting firm MarketCounsel, says advisors should look to the SEC’s Regulation S-P, which is aimed at protecting consumer financial information by requiring notice of privacy policies and by preventing the disclosure of personal information to third parties.

Most states have also adopted their own data protection programs, and many of those regulations address cybercrime related issues. “Those regulations are in place regardless of whether you’re SEC or state-registered,” says Bernstein. “It’s for anyone who has a client in that state.” He recommends looking at Massachusetts’ law, which is known for its detail in outlining preventive measures.

It’s usually easier for larger firms, with large IT departments, or even their own security experts, to keep up to date with security issues, but it’s essential that advisories of all sizes do their due diligence. Bernstein says that he sees most non-compliance penalties around regulation S-P when an advisor or broker fails to keep client information secure. Often, the infraction results in a deficiency letter, which isn’t made public, he says, while fines occur more often when client data is actually stolen. The biggest problem occurs when the advisor should have known or could have stopped the theft of a client’s information or money. In addition to legal liability and damaged reputation, advisors are likely to face regulatory penalties. “If you should have known that your client information was at risk, and you didn’t do anything to stop it, they’ll find a rule to fit that into,” says Bernstein.

Read more.

Bernstein on Cybersecurity with @finplan @PaulHechinger

Monday, October 20th, 2014

Securities lawyer Daniel Bernstein says that while there really aren’t any specific compliance regulations about cybersecurity, advisors can seek guidance from closely-related rules that are already in place. Bernstein, director of research and development at the regulatory financial consulting firm MarketCounsel, says advisors should look to the SEC’s Regulation S-P, which is aimed at protecting consumer financial information by requiring notice of privacy policies and by preventing the disclosure of personal information to third parties.

Most states have also adopted their own data protection programs, and many of those regulations address cybercrime related issues. “Those regulations are in place regardless of whether you’re SEC or state-registered,” says Bernstein. “It’s for anyone who has a client in that state.” He recommends looking at Massachusetts’ law, which is known for its detail in outlining preventive measures.

It’s usually easier for larger firms, with large IT departments, or even their own security experts, to keep up to date with security issues, but it’s essential that advisories of all sizes do their due diligence. Bernstein says that he sees most non-compliance penalties around regulation S-P when an advisor or broker fails to keep client information secure. Often, the infraction results in a deficiency letter, which isn’t made public, he says, while fines occur more often when client data is actually stolen. The biggest problem occurs when the advisor should have known or could have stopped the theft of a client’s information or money. In addition to legal liability and damaged reputation, advisors are likely to face regulatory penalties. “If you should have known that your client information was at risk, and you didn’t do anything to stop it, they’ll find a rule to fit that into,” says Bernstein.

Read more.

Betterment Crosses the Great Divide

Wednesday, October 15th, 2014

@NewsfromIN reports direct to consumer robo-advisor, Betterment, opens up to advisers.  Read more.

Brian Hamburger puts Merrill’s flash terminations under fire

Tuesday, October 14th, 2014

Hamburger @hdelux tells @RIABiz, “We’re finding a real trend lately where firms are making decisions a lot faster and with a lot fewer facts than in the past and having a lower threshold of these kinds of decisions. As a result they’re really putting innocent and loyal employees in the crossfire and in really terrible situations without being able to substantiate it.”

Read more.

Mark Cuban Takes On Snapchat With New Messaging App (and how his run-in with the SEC inspired it)

Saturday, October 11th, 2014

This is a great CNBC interview with 2014 MC Summit key-note speaker Marc Cuban related to his investment in Cyber Dust.  In the interview, he mentions his run-in with the SEC and how it inspired his interest in Cyber Dust.

http://www.cnbc.com/id/101952557

“I had my little fun with the SEC, and what happened was, every message I sent, everything that I wrote, they decided to create their own context,” he said Wednesday. “If I said, ‘The sky was blue,’ they said, ‘You didn’t really mean that. You were just trying to fool us.’ When I said, ‘I hate to lose,’ in reference to Mavericks games, they said, ‘So, you hate to lose. You’re not willing to take a loss on a share trade.’ I mean, it was just ridiculous. And so it made me realize, along with just other experiences, when you hit ‘send’ on a text, you lose ownership of that. Not only do you lose ownership, you retain responsibility for that text.”

Mark Cuban Takes On Snapchat With New Messaging App (and how his run-in with the SEC inspried it)

Saturday, October 11th, 2014

This is a great CNBC interview with 2014 MC Summit key-note speaker Marc Cuban related to his investment in Cyber Dust.  In the interview, he mentions his run-in with the SEC how it inspired his interest in Cyber Dust.

http://www.cnbc.com/id/101952557

“I had my little fun with the SEC, and what happened was, every message I sent, everything that I wrote, they decided to create their own context,” he said Wednesday. “If I said, ‘The sky was blue,’ they said, ‘You didn’t really mean that. You were just trying to fool us.’ When I said, ‘I hate to lose,’ in reference to Mavericks games, they said, ‘So, you hate to lose. You’re not willing to take a loss on a share trade.’ I mean, it was just ridiculous. And so it made me realize, along with just other experiences, when you hit ‘send’ on a text, you lose ownership of that. Not only do you lose ownership, you retain responsibility for that text.”

10 Ways Entrepreneurs Think Differently

Saturday, October 11th, 2014

This entrepreneur.com article hits the mark in terms of how entrepreneurs think.

http://www.entrepreneur.com/article/237547

Welcome to independence, Nova R Wealth.

Tuesday, October 7th, 2014

Proud to be your launch partner along with @DynastyFP.  Read more.

Terminated $2.5 billion Merrill Lynch team plans to fight back and Brian offers context @NewsfromIN

Tuesday, October 7th, 2014

Investing alongside clients is a common practice, according to Brian Hamburger, an attorney who counsels advisers on going independent. Mr. Hamburger declined to speak specifically about the Brown and Goetz case.  But recently, large brokerage firms have become increasingly willing terminate contracts with advisers, even for some of their highest-grossing teams, Mr. Hamburger said, noting that he has been working with six teams of advisers who had been “suddenly” and “unexpectedly” terminated in recent months from brokerage firms that he believed were looking to avoid the “headline risk” related to regulatory violations. He declined to provide specific names of advisers or firms.  “Every one of these instances that we’re dealing with involves a set of facts that, if we were looking at this a year ago, would not have led to a termination,” Mr. Hamburger said. “They’re making these decisions before they have all the facts that they might have previously required to make these decisions.”

It seems the advisors were trying to run a family office from within a brokerage firm.  Mr. Hamburger said those kind of issues can be a “common conflict,” for advisers who are dually registered as investments advisers and brokers and who answer to different regulatory standards.  “The advice an [investment adviser] can give is much broader,” he said. “It does not have to be limited to an individual securities transactions.”