@HdDelux to @finplan: “Broker-dealers are under fire – what they’re selling has fallen out of favor.”

“They’ll continue to find lucrative hunting grounds for broker-dealers,” says Brian Hamburger, president and CEO of MarketCounsel, a legal and compliance firm.  “Broker-dealers are under fire,” he says. “What they’re selling — let’s be blunt about it, it’s fallen out of favor.”

Hamburger has observed a shift in how the SEC has handled enforcement over the last year or so. He says that he has seen SEC enforcement staffers get involved earlier in the examination process — what he described as “pre-enforcement.”  Where there was previously “a very clear line between examination or investigation and enforcement,” he says , “we’re seeing that line really blurred over the last several months.”  Now, following an examination, it is common for an examiner to summon a firm’s principals to an SEC office for a meeting attended by enforcement attorneys, creating a “slippery slope between examination and enforcement that we didn’t used to have to deal with,” he says.

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