FINES THAT COULD HAVE BEEN PREVENTED

Eagle Eye has been around for several years now helping our clients with their general supervision of the web. One of our clients said, “as soon as we implemented Eagle Eye, the system found links that were previously missed with our manual process and as a result we updated our policy and procedures to minimize compliance risk. Also, one of our previous hurdles was demonstrating to our regulators with documentation that we were conducting the appropriate monitoring. With Eagle Eye's audits reports, that are available directly from the system, we are able to document and show individual findings in an organized manner."

We took a look at some recent FINRA disciplinary actions and discovered several cases in which fines may have been avoided through the use of Eagle Eye.

In June of this year an investment company was fined $200,000. This company failed to conduct and report on their due diligence of its registered representatives outside business activities (full case details). The findings also stated that the firm did not have an adequate supervisory system for the review of performance reports used by its registered persons in connection with outside brokerage services. The firm’s written procedures concerning performance reports did not include any provision for the supervisory review of the contents of these reports. The firm did not conduct any supervisory review of the performance reports used by its registered persons.

How do you prove your due diligence? Is your documentation in order? Read our September blog post for suggestions that are beneficial in establishing and making sure that an effective record keeping and documentation system is in order.
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Through Eagle Eye’s automated reporting features with just a click, supervisors will have everything they need when supervising their employees’ web presence including when a result was found, who reviewed it, comments that were made and timestamps on every action taken on the account. These reports give the full picture of your general reviews so that you can respond to a regulator.

In April of this year another firm was fined $150,000 for not monitoring their registered representatives’ use of social media sites. Additionally, this firm did not have a mechanism for determining whether its representatives were using social media for securities-business purposes (full case details). The findings also included that the firm failed to conduct required internal inspections, and the majority of the reports from the inspections that did occur as scheduled were inadequate. FINRA also found that the firm did not have any supervisory systems or procedures, written or otherwise, regarding its representatives.

Eagle Eye’s relevant results searches  will help you identify if your representatives are using social media. Additionally, our search results will help you find blogs, and websites applicable to your associates. Eagle Eye is designed with built-in intelligence that sifts through the web’s clutter and brings the most relevant results to your attention while conducting your reviews.

Our Eagle Eye product is a fraction of the cost of these fines. 

Many compliance professionals we talk to say Eagle Eye must be seen in action to fully appreciate how much time and energy it can save, how much it improves the quality of their search results, and how much it simplifies documentation. Eagle Eye automatically searches, documents, and reports on your web supervision responsibilities so you have everything you need to find and address issues before they are brought to your attention by a regulator.
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Want to know more about how our Eagle Eye program can work for you? Contact us today for a demo.