Nowadays, online trading has become a preferred method for many investors. From casual, at-home investors to more seasoned investors, online trading provides an accessible and efficient platform for securities trading.
While online trading has grown in popularity, there are still some common misconceptions about it. You may have heard someone telling you that online trading is not secure or that you don’t have access to actionable investment advice with these platforms.
This is untrue.
We’ve all seen bad actors in movies and T.V., but did you know that bad actors can be found on Wall Street and other financial industry institutions? The Financial Industry Regulatory Authority (FINRA) recently released a statement outlining the need for checks-and-balances against bad actors.
FINRA defines a bad actor as one within the financial industry “who seeks to evade regulatory requirements and harm investors for their own personal gain”. Essentially, they’re con artists; fraudsters.
Last week, the Securities and Exchange Commission (SEC) amended standing rules regarding broker-dealer securities transaction settlement cycles. The new rules shorten the amount of time between when an investment transaction is placed and when it is actually processed.
Previously, the transaction settlement cycle was set as “T+3”. This refers to the time, in days, that lapse before a transaction is settled. For instance, if you buy or sell a security on Monday, Thursday would be the day the transaction is settled.
The SEC has set the new settlement cycle to “T+2”, meaning only two days bass between transaction and settlement. This change is set to take effect for all transactions on or following September 5, 2017.
The Federal Reserve recently announced that interest rate hikes likely, causing trading and investing to slow. Fed Chairwoman, Janet Yellen will most likely announce increases later this week, with several more expected throughout 2017. Rates will likely increase 0.75-1.00 percent, initially, according to a Reuters report.
The Fed’s announcement considerably slowed the recent tech and industrial market rally Wall Street has been experiencing. Investors and securities traders are waiting to see how these increased rates will affect market holdings.
By the end of 2017, the New York Stock Exchange (NYSE) will open up its trading floor to all U.S. securities. Currently, NYSE restricts securities trading on the floor to the top 3,166 stocks, according to a Reuters report.
The change means that, now, up to 8,600 securities can be traded by floor brokers.
So, how does this change meet with the rising popularity of electronic trading and what does this change mean for investors?
The Financial Industry Regulation Authority (FINRA) announced fines against 12 securities firms for their failure to accurately protect consumer records.
FINRA carried out fines, totaling $14.4 million, against 12 securities brokerage firms, including some of the largest-backed firms in the country.
FINRA found that these firms storing broker-dealer and consumer records without precautions in place to prevent alteration.
Last week, the Securities and Exchange Commission (SEC) charged two individuals in a fake day-trading scheme targeting inexperienced investors.
According to the SEC’s press release, the two men in question scammed investors out of more than $1.4 million through the operation of a false day-trading investment firm.
Ever wonder about how customer disputes are resolved between investors and broker-dealers?
Is a lawsuit necessary?
Do you need to hire a lawyer?
Last week, the Financial Industry Regulatory Authority (FINRA) handed out a $650,000 fine to a broker-dealer in the Lincoln Financial Network. The industry watchdog group found that the independent broker-dealer in Lincoln Financial’s network allowed thousands of customers’ data to be exposed to foreign hackers.
Similarly FINRA also found that Lincoln Financial Securities Corp. failed to ensure the security of their customers’ consolidated reports.
Securities Fraud Lawyers Blog