FINRA recently sent out Regulatory Notice 20-30 regarding an increase in imposter advisor websites being created with malicious intent. These fraudsters are also calling and directing potential customers to use these imposter websites. Additionally these imposters may be using these sites to collect personal information from potential customers with the likely end goal of committing financial fraud.
According to FINRA, some common features of these websites include:
FINRA suggests that “Member firms and registered representatives can take steps to identify these pages by conducting periodic web searches using registered representatives’ names.”
The potential damage of an Imposter Website could be irreversible. What can you do?
Eagle Eye by SiteQuest Compliance has everything you need to monitor the internet and discover imposter sites and other compliance threats to your firm. Our multi-query processes, lexicon searches and dynamically designed algorithms provides more accurate search results saving you time and automatically alerting you to new search results concerning your registered representatives’ identity.
Additionally, our system considers the domain name as it searches for results and scores them for potential reviews.
Our easy-to-use workflows allow you to quickly review dozens to hundreds of search results in minutes. Many of our clients have found that with Eagle Eye they cut their workload by 80%.
If you do discover an imposter website contact FINRA and the FBI immediately.
See for yourself how Eagle Eye will support your compliance and supervision programs to monitor the web and discover these types of issues and more. Contact us today for your personalized demo.
Eagle Eye also supports your firm’s adherence to regulatory requirements like FINRA Rules 2210, 3110, 3120, and 3270 by providing supervision of the internet.
Read the Entire Regulatory Notice 20-30
When speaking with our clients often times they share with us their supervision concerns and challenges. Among them are:
Eagle Eye monitors 50,000+ advisors across our customer base and has automatically alerted compliance supervisors on over 1.2M discoveries that warranted reviews over the past 3 years. This is broken down by:
Solutions That Eagle Eye Provides.
Eagle Eye uncovers and supervises your advisors’ online footprint. It discovers social media accounts, websites, blogs, OBAs, DBAs, online profiles, events that belong or are about your advisors, allowing you to address issues prior to regulatory discovery or examination.
Eagle Eye supports your firm’s adherence to regulatory requirements such as FINRA Rules 3270, 3110, 2210, and 3120 by providing supervision of the internet.
Let’s face it, the coronavirus pandemic has fundamentally changed the way we do business. Most of our industry is working from home, learning to balance conference calls and kids with questions that just can’t wait or dogs that must bark while on a Zoom meeting. We’ve all been there and have our moments.
Other things have changed as well, especially when it comes to marketing and advertising. This is especially true for financial advisors who have lost the ability to connect with clients at events, lunches, in office or at home meetings or simple introductions that come from face-to-face interactions. or years, many advisor’s businesses have primarily depended on these methods to connect with current clients and meet new prospects. Social distancing and stay at home orders have eliminated these options for many advisors who are now exploring new options to prospect and connect with people.
So where are they turning? Like everyone else, advisors are turning to technology to increase their online presence with updated profiles while sharing fresh and timely content.
I recently spoke to some of our clients about trends they were seeing regarding their advisor’s marketing and advertising behaviors since social distancing and stay home orders began. One compliance manager told me his firm has seen a 30% increase in advertising submissions as well as a significant increase in the use of approved social media sites like Facebook, LinkedIn and Twitter.
Another client told me, “Advisors have ‘downtime’ and are now thinking a lot about marketing.” I followed up on how things have changed for our client as a result. “Don’t get me started on how much social media usage has jumped since this all began!” They have seen an increase of 25% to 30% in usage and a surge in new accounts being created by their advisors.
Social Media usage is certainly on the rise. A recent survey showed that 32% of Americans said they have increased the amount of time they are using social media sites like Facebook and Twitter.
Another firm told me that advisors who have typically shied away from social media, online profiles, websites, and other marketing technologies are now diving in for the first time. I was told, “Their (advisors) traditional lead generation tools aren’t available anymore. They now have time and are focusing on new ways to build their business.”
Additionally, our clients are seeing a big increase in advertising submissions for recordings from Zoom/online meetings. Advisors are continually seeking guidance on additional options for communicating and marketing to the public.
This all presents an increasing challenge in supervision and compliance, especially when there are growing limitations on human resources.
That’s where our Eagle Eye technology comes in. Eagle Eye helps our clients uncover their advisors’ web presence, locating social media accounts, websites, articles, profiles, videos, OBA’s and more. Eagle Eye creates automated documentation of what has been reviewed, who did the review, and what the website looked like at the time of review, giving our clients and regulators a complete picture of the process. They use our system to discover and “clean up” situations where the use of these sites was done without approvals or monitoring in place.
Another one of our clients shared with us that, “Thanks to Eagle Eye, it is helping me identify and address issues before they are brought to my attention by a regulator.”
With our industry evolving, SiteQuest Compliance is a preferred partner when it comes to internet supervision and website management.
Contact us today for your personalized demo where we can discuss your supervision concerns and see for yourself how Eagle Eye can support your internet supervision requirements.
Over the past month, as our clients have transitioned to working from home, several re-occurring themes continue to present themselves. Homeworkers are extremely busy with seemingly more to do than ever. Additionally, with increased workloads, increased hours at the desk, the stresses of isolation, and the overall COVID-19 pandemic, home workers are finding they are “tired all the time”. As someone who has worked successfully from home for the past six-year, I can certainly say that I’m feeling it as well.
As we all try to cope with these changes and fight the mental and physical strain of it all, perhaps now, more than ever, we all need a quick timeout and a quick nap.
Ah, the afternoon nap. Many think that it is just for infants, toddlers, and slackers. But in truth, many of us are chronically sleep-deprived and the quickest of naps can do wonders. In speaking with one of my clients recently, she mentioned to me that her lunch hour is now her “nap hour”.
Her “nappytime” as my mom would call it, has really helped her disconnect from the stress of the day and increased her productivity.
Think of the lessons we learn about taking a break to sharpen our axes because a dull ax produces less chopped wood than a sharpened ax.
Most experts recommend a nap of 10-20 minutes, any longer can lead to "sleep inertia" – grogginess that can be hard to snap out of. But how can a mere 20 minutes of daytime slumber really help?
Consider the following:
Provides a Memory Boost
In one study, participants who napped regularly improved their performance on cognitive tests of memory and vigilance conducted in the subsequent two and a half hours.
The National Sleep Foundation reports that a NASA study on sleepy military pilots and astronauts found that a 40-minute nap improved performance by 34% and alertness 100% percent. While you may not be driving a spaceship, the foundation recommends a quick nap before driving your car to reduce the risk of a drowsy driving car crash.
The mind loves a nap. Daytime sleep can, “enhance creative thinking, boost cognitive processing, improve memory recall and generally clear out the cobwebs," James Maas and Rebecca Robbins, co-founders of Sleep for Success wrote.
Things can be tough when you’re tired, especially when it comes to matters of willpower which is often strongest in the morning when the brain is fresh. When you’re sleep deprived, your brain has an especially hard time ignoring distractions and controlling impulses. A mid-day “power nap” can reverse the usual willpower drain from morning to night,” adding that a nap can reduce stress, improve mood, and restore focus.
Calms Your Nerves
A University of Berkeley study found that a 90-minute nap can potentially keep you calm. When study participants were shown faces that expressed anger, fear and happiness at noon, and then again at 6:00 p.m. They found that the subjects were significantly more upset by angry and fearful faces later in the day; but not if they had a 90-minute lunchtime nap in which they experienced REM sleep.
Lowers Blood Pressure
A study published in the Journal of Applied Physiology found that the “siesta habit” is associated with a 37% reduction in coronary mortality, possibly because of reduced cardiovascular stress associated with daytime sleep. While they admit that they don’t know whether the benefit came from the nap itself, or a reclined position, they concluded that this decrease in blood pressure may be why lower coronary mortality has been found in those who take naps.
It’s Better than Coffee… or in my Case Diet Coke
Researchers have found that while longer naps may cause grogginess, they also get in some good REM sleep which is where complex learning and perceptual skills are benefitted. In one experiment, sleep scientist Sara Mednick and her team directly compared caffeine intake (200 mg) with napping (60–90 minutes) and placebo on three distinct memory processes: declarative verbal memory, procedural motor skills, and perceptual learning. Overall, the nap improved performance across all three different learning areas, while caffeine impaired (or at least did not benefit) performance.
Although the benefits of naps are many, not everyone has an easy time falling asleep in the middle of the day. For those, even just quiet momentary pause or meditation can do wonders. Simple breathing exercises – like breathing slowly can help slow down your brain and can be refreshing.
Now, more than ever we need to take the opportunity to pause, refresh, and enjoy a short afternoon nap.
Let me know (after my nap), how your work has improved because of taking the time to regularly nap.
I've worked remotely for almost seven years now and our entire team here at SiteQuest Compliance telecommutes as well. If you're new to the work-from-home lifestyle, whether due to coronavirus or because you've managed to find a remote-based job, you'll likely need to change some of your habits and routines to make working from home a success.
Here are a few things we’ve learned over the years to help us transition from in office work to working from home.
Where to Start? When working from home I recommend creating a dedicated space for work. If possible work in a room where you can close the door. Closing a door helps shut out the outside distractions and also helps your family or roommates know that you are busy and not to be disturbed.
Get Comfortable. Get a desk and have a clear and clean space to work. Your desk should be free from any “home” clutter such as home projects or kids assignments. Investing in a good chair is paramount. When working from home a majority of your time will be spent sitting down. If you don’t have a great chair and need to buy one, don’t scrimp on something cheap. Buy the best you can afford, as you’ll be spending lots of time in it. When you have a comfortable/supportive chair you will become more productive and have fewer aches and pains from sitting at your desk.
Hunched over the coffee table, or sitting on the ground doesn't lead to a productive day.
Find The Light. When I first started working from home my office was in a basement. It felt dark and cold. Sometimes I dreaded “going to work”. Today, I have moved my office upstairs. Positioning my desk near a window getting much more light from the sun. I have found that my productivity has significantly increased since I add more light to my work space.
The Kitchen Table Is Not Your Friend. If you are unable to have a room dedicated as your “in-home office” I would clear out a corner in a room with less traffic. Many people try to work from the kitchen table, which is often the central hub for a home. With people coming and going, distractions are high. You will get interrupted the most if you try to work from the kitchen, and trying to do calls while being in the center of the action is nearly impossible. Don’t get me started on sitting in table chairs for more than 45 minutes.
Communicate Expectations with the People in Your Space. Set ground rules with other people in your home or who share your space for when you work. If you have children who come home from school while you're still working, they need clear rules about what they can and cannot do during that time. My children know that if they need me, a soft knock is how to get my attention. If I don’t answer the door or they can hear my voice, they know that I am on a conference call. Unless it is a real emergency then they are to come back a little later.
Put Your Smart Phone Down. When we leave working from the office, the first problem is how do we communicate on the phone. Holding up a smartphone to your head for much of the day is not the answer. Many people like to use ear buds when talking on the phone with co-workers and clients. This is okay, but having VOIP options like RingCentral or Ooma for direct calls is better. For group meetings, we’ve used Zoom, GoToMeeting, Webex, Chime and Google Hangouts. Each has their merits of course, but most importantly, these options leave your hands free to type and take notes.
Create a Routine. Start each work day around the same time each day. I rarely “go to work” without showering and getting ready for the day. Don’t work in your pajamas. Going through the motions of getting ready helps you mentally prepare for the work day. Set a schedule, and stick to it...a much as possible. Having clear guidelines for when to work and when to call it a day helps many remote workers maintain work-life balance. That said, one of the benefits of remote work is flexibility, and sometimes you need to extend your day or start early to accommodate someone else's time zone. When you do, be sure to wrap up earlier than usual or sleep in a bit the next morning to make up for it.
Work in sections. Every hour or two take a 10-15 minute break. Get up and walk around. Get a drink or snack. During these short breaks go check on the kids and make sure that they are doing ok. Many times I will go outside and return some phone calls while I am getting some fresh air. By taking these short breaks you will become more refreshed when it is time to get back to work and your productivity will go up.
Make It Personal. Above all else, figure out what works best for you. Sometimes the answer is apparent, but other times you might need some inspiration from other people who are in the same boat. A supportive community of remote employees does exist, whether you find them within your organization, or online through blogs, LinkedIn, or Twitter.
Our entire team at SiteQuest Compliance has been working remotely for many years now and as a result, we continue to be available and ready to answer any of your questions or resolve any technical inquiries that might arise.
Reach out to me personally at email@example.com and let me know how I can help.
Together we will continually discover ways to keep connected, and stay productive while working from our homes.
2020 is a big year for us as we are celebrating 10 years of compliance partnerships. There have been many significant changes in supervision over the past 10 years, especially with an increase in workload and scope for online supervision. Trying to stay compliant with the FINRA 3110 Supervision rule can become a daunting task as the web offers an easy to use and often free resources for advisors to get their name and practice out in the public eye.
As YOUR compliance partner, we’ve observed several interesting trends that we expect to see increase during 2020.
With the increase in online articles being published on blogs, websites, and social media sites like Linkedin, many advisors are writing, being mentioned, and even cited in third party articles. We continue to see these occurrences with very little if any disclosure information and perhaps is not considered pre-approved content.
Have you heard of Quora? Quora is an online question and answer platform. 775,000 people use Quora monthly to ask questions. This is a large audience that advisors have the ability to connect with. They can publish content, answer people’s questions, and search for specific topics that relate to your industry. BUT how do you know if your registered advisors are using Quora?
Yelp is another online platform that is continually growing in popularity. The Securities and Exchange Commission recently charged three advisers and a marketing firm for violating the testimonial rule by promoting their business on Yelp. Over 4.6 million businesses are using Yelp. With 163 million Yelp reviews, how are you to know if your advisors are actively soliciting testimonials from their clients?
Adding to your monitoring struggle is YouTube. It is estimated that over 300 hours of video are uploaded to YouTube every minute! There is an increasing trend in people publishing personal video and vlogs related to their business. With over 1 billion daily users how are you to find videos uploaded to YouTube by your registered advisors if they don’t send you the direct links?
Advisors can create non-monitored social media accounts. How do you know if your advisors even have a social media account if they don’t tell you about it? How do you find these social media accounts?
One of the biggest trends that we see continuing into 2020 are the use of DBAs. FINRA observed that “certain firms were not maintaining sufficient WSPs and controls, or providing adequate disclosures regarding the use of DBA names.” Outside business activities and unauthorized content from your registered advisors are a growing concern that will always be present. What controls does your firm have in place to aid you in discovering these DBAs if your advisors are not disclosing them? How do you know what your advisors are putting online using their “DBA” name?
Your time is valuable. Any search engine can produce an endless amount of meaningless results that need to be reviewed. Our Eagle Eye application is designed with built-in intelligence that sifts through the web’s clutter and brings the most relevant results to your attention. Our multi-query processes and dynamically designed algorithms provide more accurate results for a quick review process. In addition to our search results our automated screenshots feature helps you document, report and escalate any issue that is brought to your attention.
One of our clients said :
"The Eagle Eye Surveillance system has been a force multiplier in my firm’s supervisory scheme. This simple tool has transformed my internet surveillance sweep process from a time-consuming, multi-day enterprise where I view the same search results over and over to a simple process that can be completed in a couple of hours."
Another one of our clients said:
“As soon as we implemented Eagle Eye, the system found searches that were previously missed with the 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 but with the audits reports, that are available directly from the system, we are able to document and show individual findings in an organized manner."
You can minimize your risk and address these growing trends by utilizing our Eagle Eye application.
Contact us today for your personalized demo of how our application with work for YOUR firm.
A securities corporation in California was recently censured and fined for a variety of violations related to their WSPs.
“Representatives were able to maintain business-related pages on a social media site that had not been preapproved by a qualified registered principal. As a result of the firm not reasonably monitoring for usage of undisclosed websites, it failed to preapprove websites operated by representatives as required by its WSPs.”
The Securities Corporation’s WSPs required that the firm conduct a weekly review of registered representatives' social media sites that had been disclosed to the firm. Notwithstanding the firm's WSPs, this firm failed to conduct such a review 22 times out of a sample of 26 weeks reviewed by FINRA.
Additionally, during this audit period, the firm's WSPs required that a registered representative receive preapproval for a webpage on a business-related social media site. Because the firm did not have a reasonable system to monitor for compliance with its social media policies. 38 registered representatives were able to maintain business-related webpages on a social media site that had not been preapproved by a qualified registered principal. Additionally, because the firm did not reasonably monitor for usage of undisclosed websites, the firm failed to preapprove four websites operated by registered representatives as required by the firm's WSPs.
It can become very time consuming for a CCO to manually perform weekly reviews on advisors' websites and online presence. Automation is the key to any compliance program and that is where SiteQuest Compliance is able to assist you on a variety of fronts.
We often hear from CCOs Eagle Eye uncovers undisclosed social media accounts.
How are you to supervise these accounts when you don’t even know about them in the first place?
That is where our Eagle Eye application comes in to support your internet supervision methods. With “Eagle Eyes”, our application will help you search, discover, and document your advisors’ online presence. This includes undisclosed social media accounts, websites, blogs, and more. With customizable workflows this application will help you approve, or flag for further review each discovery.
This firm was also cited and fined for failing to monitor websites, and for not pre-approving websites operated by their representatives. SiteQuest Compliance brings you years of experience when it comes to web crawling, monitoring, archiving, and website analysis with our SQWatcher application.
SQWatcher can monitor websites hosted on your network, or an outside hosting systems. We would love to personally demonstrate how our applications will support and enhance your supervision processes.
Let us show you how it is done. Schedule your personalized demo today.
Source: (FINRA Case #2015047824201)
Are you ready for the February 1, 2020 implementation deadline?
In 2019, the New York Department of Financial Services (DFS) announced an amendment to the “New York Insurance Regulation 187” that affects annuities and life insurance sales.
“It requires insurers to establish standards and procedures to supervise recommendations by agents and brokers to consumers with respect to life insurance policies and annuity contracts issued in New York State so that any transaction with respect to those policies is in the best interest of the consumer and appropriately addresses the insurance needs and financial objectives of the consumer at the time of the transaction.” (DFS Press Release)
What does this mean for compliance supervisors? For firms issuing annuities, they must now do an online review for names and titles used by the registered representative that are selling their products in the State of New York.
“An insurer shall establish, maintain, and audit a system of supervision that is reasonably designed to achieve the insurer’s and producers’ compliance with this policy.” (Section 224.6)
Eagle Eye is already the partner of choice for many firms when it comes to supervising a registered representative’s online presence. With this updated rule, those utilizing our Eagle Eye application have a tool in place that monitors for this new regulation.
Consider partnering with Eagle Eye. For 10 years, SiteQuest Compliance is a trusted supervision and compliance partner. Let us show you how our application will save you time while streamlining your supervision processes and automatically documenting and reporting on your findings.
Contact us today to schedule your personalized demo.
Ten years ago, SiteQuest Technologies was created with the mission to make compliance supervision easier and more efficient by providing user-friendly applications to help financial firms stay compliant in the ever-changing digital world. Working side-by-side, truly listening to what our customers need and want, and developing solutions to meet those needs is still is our focus today.
With our customers in mind, we are excited to announce that SiteQuest Technologies is updating its name to SiteQuest Compliance. As rules and regulations evolve, our customers’ challenges are ever-increasing. From workflows to policies, to website monitoring and archiving, to internet supervision, to discovering undisclosed OBAs and social media accounts, our suite of compliance solutions provide financial firms with the tools they need.
While our name has changed, our values have not. As a company, and as individuals, we value integrity, honesty, continual improvement, and innovation. We are committed to our customers and work with them as partners, to be an industry leader in compliance applications.
Our SiteQuest Compliance team brings many years of experience in this industry. We know the challenges compliance and supervision brings, and we look forward to many more years of serving our great customers and partners.
In alignment with the adoption of a new name, SiteQuest Compliance has launched a new website at SQCOMPLIANCE.COM.
Thank you for visiting our new website. Take a moment and look around. Contact us to see how our applications will assist you with your everyday compliance needs and challenges.
President & CEO
A securities firm and its chief compliance officer were fined $225,000 by FINRA and required to retain an expert to evaluate and approve its written supervisory procedures (WSPs).
** We would like to note that the actions of this CCO are not the norm. This person committed many willful violations which led to this fine. But, many of the violations were in direct relation to supervision. SiteQuest Compliance provides solutions to CCO in regards to internet and website supervision. That is the primary focus of our article review.
“The NAC found that this securities firm and the CCO violated NASD Rules 3010 and 2110 and FINRA Rule 2010 by failing to establish and maintain an effective supervisory system, including written supervisory procedures (“WSPs”)… The firm then failed to implement a supervisory system to reasonably ensure appropriate review and supervision of the websites.”
NASD Rule 3010 required that FINRA member firms have reasonable supervisory procedures. The CCO in this case was responsible for reviewing and drafting the firm’s WSPs, and the WSPs provided that all advertising would be reviewed for misleading or inaccurate statements and that the firm’s president, would do so. The firm’s WSPs also specified that “all business messages on the internet shall be considered advertising.” And NASD Rule 2210 defined “advertisements” to include “any material . . . that is published, or used in any electronic . . . public media, including any website.” The NAC faulted the CCO for not “identifying” in the WSPs that “websites are advertising to be reviewed”; its rationale for holding the CCO liable when “the firm’s procedures did not specifically state that websites were advertising.” One registered advisor for this securities firm created two non-password-protected, publicly available websites. This firm and the CCO didn’t ensure appropriate review and supervision of these websites as advertising.
In the end, the NEC found that the firm’s failure to supervise the websites violated NASD Rules 3010 and 2110 and FINRA Rule 2010.
Our SQWatcher application would have been a great resource and support for this securities firm. SQWatcher is a web-based solution that TRACKS, MONITORS, and DOCUMENTS your websites assisting with your compliance. With SQWatcher, you have a partner that is built to support your firm, knowing that your required websites are being monitored and archived with tools that will alert you if there is a problem. With an easy to use interface, we will personally support you through the implementation and learning process, continually ongoing to ensure that you and your firm are getting the most out of this industry-leading application.
The NEC stated that “We reiterate here that compliance officers “play a vital role in our regulatory framework. That role in many instances has increased in complexity, and there are circumstances where the role presents difficult challenges. In making determinations about CCO liability, the protection of investors and the public interest are at the forefront of our minds.”
SiteQuest Compliance has over 15 years of industry experience supporting CCOs with their ever changing and increasingly complex job requirements.
Every day, thousands of advisors and advisor websites are being monitored and documented with the aid of our industry-leading compliance and supervision applications. We are proud to be a partner in compliance. We would love to discuss your compliance concerns. Contact us today!
Source: (FINRA Case #2011027666902)
About James Cella
James Cella is the President of a growing and innovative compliance technology provider called SiteQuest Compliance. James is a customer-centric individual and focuses on building and sustaining positive and lasting relationship with his clients and partners. James and his family are "super fans" of Utah Football and have attended nearly every home game since 2002. Go Utes!