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 I’M SURE I HAVE SOME COMPLIANCE GAPS, BUT DON’T KNOW WHERE TO START...
It can be very challenging for financial firms to search, monitor, and document their advisor's web presence and registered websites without interrupting day-to-day business demands and operations. Yet failure to do so can leave exposed compliance gaps unaddressed and open your firm up to fines and disciplinary actions from regulatory agencies. Common compliance gaps often include improperly documented or improperly enforced policies and procedures, insufficient evidence of a WSP, undisclosed OBAs and social media accounts, as well as rogue advisor websites. Many firms know that they have gaps, but they don’t know where to start. FINRA publishes a monthly disciplinary report with actions and fines against firms and individuals. One of the most common fines involves undisclosed OBAs. Currently, many firms work on the “honor system” with hopes that their employees with be completely honest and disclose everything required. Unfortunately, this honor system doesn’t always work. How are you to find out if your advisors have an undisclosed OBA? That is where Eagle Eye can help you close this gap with our deep web searching technology that quickly cut through the clutter of the web and bring to your attention relevant results when monitoring your registered reps. Do you know if your advisors have disclosed all of their social media accounts? In a recent random sampling of 10 employees from a prospective client, our Eagle Eye solution found serious violations with three of the advisors including several OBAs and social media accounts that were never disclosed. This is a typical compliance gap for many firms. Is this one your firm is facing as well? Are you sure that your firm is monitoring all of your advisors online advertising? Do you have a process in place that is easy to demonstrate to a regulator? Do you even know if they are producing advertising that you are unaware of? This could be another compliance gap your firm is facing. In addition to all of the supervision regulations, you need to prove that your firm has WSPs in place to help document all of the actions your firm is taking to monitor web presence. For many firms, this turns into another compliance gap they need to address. You have a broker-dealer responsibility to monitor every website that your advisors' utilize for business purposes. Many times, advisors want to have their own website to help them stand out among the thousands of other financial advisor websites out there. How are you monitoring these websites? Are you notified of every change automatically so that it can be approved? If not, here is another compliance gap you might be facing, there has been an increase in fines imposed by FINRA regarding website monitoring. SiteQuest Compliance's SQWatcher program is an easy to use solution that will quickly help you fill this gap at a fraction of the cost of a fine. Then to complete all of this monitoring you need to document all of your findings in an organized manner. Many times this is the last step in the compliance process and yet it can become one of the largest compliance gaps for a firm. Our automated documentation features found as part of our programs are detailed and searchable. We provide you with all of the information you need to respond to a regulator. SiteQuest Compliance offers programs, support, and experience to help you bridge these gaps and respond to a regulator. A firm that is able to demonstrate compliance with tangible evidence will mitigate risks, such as costly regulatory fines, and be better prepared for unannounced visits from regulatory agencies. Contact us today and talk to us about any gaps you need help addressing. 2/15/2023
Do Google Alerts Work for Supervision? Are you relying on ‘google alerts’ to track advisors’ online presence?
Google alerts are somewhat easy to set up, but are they finding everything? We created our own in-house case study and set up alerts on several team members. As a result, over the last six months, we received about 200 “alert emails” . . . And not one was applicable to any of our team members. Most Google Alerts received are not relevant to what supervision is actually looking for, the primary reason for this is that Google Alerts primarily searches big news sites and blogs. As compliance supervisors, you are looking for information and results usually not covered by mainstream media; these are published in niche industry and regional publications, discussion forums, institute websites, and more. Google alerts require you to add extra characters such as @ and # to help refine your search, but be careful, extra spaces in your alerts can make your searches ineffective. Additionally, it is very difficult to set up alerts if you don’t have a Gmail account. Checking another email account for alerts just adds to your workload. As supervisors’ inboxes become inundated with "email alerts” that have nothing to do with their registered advisors, they may miss important emails from your firm and associates. There isn’t a way to turn off notifications for a specific alert “discovery”. One of our employees has the same name as a contributing author for a prominent news agency. Our email box was alerted daily with her latest article, but this was not the person we were interested in. The only thing we could do was open, read, and then delete these continual email alerts. In addition to the work of going through extra emails, there is the required documentation. Compliance needs to manually copy and paste all the email information and save it somewhere on their network. Hopefully filed logically so that compliance can quickly find it again when requested. This is why Eagle Eye was developed. Eagle Eye eliminates time-consuming, ineffective, manual search processes with easy-to-use workflows and automated documentation. It uncovers and reduces compliance and “failure to supervise” risks while demonstrating to regulators that your firm has a formalized internet supervision program in compliance with FINRA and SEC rules. De-clutter your inbox and stop relying on ineffective alerts. Contact us today for your personalized demonstration and see for yourself how Eagle Eye will improve your efficiencies and support your supervision program. Sources: https://support.google.com/ https://mention.com/en/blog/google-alerts/ https://thefinancialbrand.com/28346/google-alerts-broken/ https://www.contify.com/resources/blog/how-does-google-alerts-work-and-why-it-doesnt/ 2/14/2022
2022 Supervision Trends 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 2022. 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 2022 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."
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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."
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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. Sources: https://www.sec.gov/enforce/3-18586-90-s https://www.finra.org/sites/default/files/2018_exam_findings.pdf  When conducting web searches on Google™ or Bing™, how accurate are the results typically? Of course if you’re looking for someone who has a large and prominent web presence, Google searches can be easy. A Google Search on Lebron James will give you plenty of accurate results, but let’s be real. When supervising an advisor, it can be like searching for a single needle in a vast array of haystacks. Eagle Eye’s accuracy for a Broker Dealer client who has used the system for less than one year. Take my name as an example: James Cella. It’s not a common name, BUT there are over 50 James Cella’s in the United States and many of us have a decent web presence. One is a lawyer, another a hollywood film producer while another is a sports information director at a small university. So if one were to try to supervise me and were to Google my name, they would only find 4 results out of Google’s top 50 were actually me. That’s a whooping 8% accuracy. Now one could say that I don’t exist on the web and hence the low results, but the fact is that I do exist on the web with:
So 4 results in the top 50 returned by Google is flat out terrible. Just image how it would look if I were named John Smith. When we released Eagle Eye we set out to design an application that dramatically increased the odds of finding the James Cellas, Sally Jenkins, Timothy Freemans, or whomever our clients needed to supervise. So how are we doing? Overall the numbers are pretty impressive. Our clients generally review anywhere from the top 20 to top 30 results found by the system and they are averaging around 55% to 67% accuracy. One client who has been on the system for nearly a year has an accuracy of 72% in their top 30 and an insane 82% in their top 15. That means that for every 10 results they are reviewing, 7 to 8 of them are the people they are looking for and this is after the company has blacklisted domains they don’t want to review like whitepages.com or classmates.com. How do we do it? We can’t reveal all the ingredients of the secret sauce, but we can tell you that we’ve built complex algorithms and intelligence into Eagle Eye so that it learns as your firm performs reviews. So what does all this accuracy give you?
  Recently I was told by a longtime client that our customer service is “old fashioned, but in a good way”. Perhaps that is the last thing a technology company wants to hear. As president of SiteQuest Compliance, I reflected over what our client meant in that statement. We do pride ourselves on the fact that when you call our office with questions or in need of technical support, that your call is quickly answered by a live person. We don’t force our clients to use service tags, make them navigate unhelpful phone trees, or waste time waiting in queues listening to mundane hold music. We are there for our customers, with a readiness and willingness to meet and exceed their expectations. A compliance supervisor that has been using our applications for several years recently said that “SiteQuest Compliance provides top notch service. They are always happy to hear from me and have exceptional response time. No tickets, bills or painful processes, just a happy voice ready to help.” Another compliance supervisor utilizing our Eagle Eye program said; ‘I deal with vendor support in my day-to-day job. SiteQuest Compliance stands out because they provide prompt service and always take it to the next level to ensure I'm satisfied.” Another one of our clients said that, “I have been using SiteQuest Compliance's Eagle Eye program for almost two years now and have had excellent results. The system does exactly what it was designed to do and we have received excellent customer service from the company. Highly recommended.” We make it easy to contact us with our phone numbers posted right on our website under the “Contact Us” menu header. We enjoy and look forward to our phone conversations with our clients who we know by name and personally as well.
We may be called “old fashioned” when it comes to our customer service, but we accept that name with pride in knowing that it sets us apart from others. Feel free to reach out to me with any questions or web supervision needs that might arise. James Cella President & CEO 801.896.0951 [email protected]  Eagle Eye has proven to be incredibly effective at reducing risk as it continues to find websites, social media accounts and blog posts on the web that pose compliant risks to a firm, but did you know that it also saves time? Yes, a lot of time. One of our Eagle Eye clients recently reported that they were able to reduce their web supervision time by 80% since switching to Eagle Eye. That’s a huge number. How’s the firm utilizing their newly found time? First, they are expanding their web surveillance program by increasing the depth of Eagle Eye’s search results (at no additional cost by the way). By increasing the depth by 60%, they’ll be able to uncover additional risks while demonstrating to their examiners and regulators that they are meeting their requirements for reasonable supervision outlined in NASD 3010, IM 30103, 3012, FINRA 2210 and FINRA 3270. What else are they doing with their extra time? Well of course they now have time for those extra compliance projects that have been slipping through the cracks over the past few years. With Eagle Eye, not only do you reduce risk and meet your compliance and supervision responsibilities, you save lots and lots of time. Isn’t extra time a wonderful thing? 9/20/2021
PART TWO OF NATIONAL PREPAREDNESS MONTH Continually Making Sure Your Monitoring Records and Documentation are in Order
This is not a preparedness matter to take lightly. Just last November FINRA fined a Tier One Company $2.6 million for failures in required electronic records and email retention. Read the full report. The benefits of maintaining accurate, reliable and usable records can help to increase the efficiency and effectiveness of your business. It will ensure your firm is able to access information when required and meet all accountability and compliance requirements. Below are some suggestions that are beneficial in establishing and making sure that an effective record keeping and documentation system is in order when you are monitoring your associates' web presence. Planning. Establish what processes are needed for monitoring records to be effectively maintained and how this will be achieved. Planning a monitoring process will help you maintain a record keeping system that works for your firm and provides clear expectations for supervisors and compliance officers. Consistency. To make it easier for compliance staff members to do their job, have information collected and stored in a consistent way within your firm's network; all staff should follow the same policies and procedures. Communication. Have all your staff made aware of, and ensure they understand, the FINRA general supervision requirements. Verify that all supervisors know and follow the record keeping policies and procedures established by your firm. By communicating expectations clearly, you will benefit from consistent record keeping standards. Modify. Don’t be afraid to modify your record keeping system if you find a more efficient way to achieve results. Regular reviews of your record keeping systems will keep them up-to-date and operating in a way that is beneficial to your firm. Responsibility. Know your responsibilities—what to record, how to maintain records and how long they should be kept. Having accurate and reliable records during an audit will allow you to easily confirm your firm’s compliance. Review. Encourage staff to provide feedback on how the monitoring record keeping system is working and how it could be improved. In doing this, you may gain valuable suggestions that will bring continuous improvement to your administrative records, improving the efficiencies of the practice. Embrace technology. Regularly investing in technology will help improve the efficiency of your general supervision monitoring requirements. Your staff will appreciate any efforts made to improve and automate the task of keeping records, giving them additional job satisfaction. Additionally, removing manual steps not only makes the record keeping process more efficient, it also makes the records uniform and reduces the risk of human error. Our clients have found that Eagle Eye’s automated reporting features saves them valuable time. With just a click, you will have everything you need including when a result was found, who reviewed it, comments that were made and time stamps on every action taken on the account. From a regulatory point of view, with Eagle Eye’s automated screenshots you will have the full story of what content looked like at the time of review, giving you everything you need to respond to a regulator. Supervising the web doesn’t have to be difficult! Let us show you how Eagle Eye is a more effective solution. Contact us today for a demo. 2/26/2021
Compliance with FINRA Rule 2210 The “Communications with the Public” Rule FINRA 2210 states that “an appropriately qualified registered principal of the member must pre-approve each retail communication before the earlier of its use or filing with FINRA's Advertising Regulation Department ("Department").”
“Retail Communications” include all electronic formats as well. In addition to supervision approval: “Each member shall establish written procedures that are appropriate to its business, size, structure, and customers for the review by an appropriately qualified registered principal of institutional communications used by the member and its associated persons. Such procedures must be reasonably designed to ensure that institutional communications comply with applicable standards.” Our Eagle Eye and SQWatcher applications support your compliance program when it comes to complying with this rule. Our innovative Eagle Eye application will search the internet and allow supervisors to identify and discover your registered advisors’ online presence. Our multi-query processes and dynamically designed algorithms provide more accurate search results for supervisors to quickly review. With our automated documentation and reporting features, you will have everything you need including when a result was found, who reviewed it, comments that were made and timestamps on every action taken during the online supervision of your registered advisors. SQWatcher will supervise and archive all websites, even those not hosted with your approved providers. It will organize web-page changes into a manageable, easy to use workflow. Automatic triggers based upon your requirements will notify you of pending reviews. These products were developed for the compliance supervisors who are looking for automated solutions to replace manual processes that prove to be ineffective and tedious. Note: NASD Rule 2210 has been superseded by FINRA Rule 2210. Source: https://www.finra.org/rules-guidance/rulebooks/finra-rules/2210  What controls does your firm have in place to aid you in discovering DBAs if your advisors are not disclosing them? “FINRA’s examination, surveillance and risk monitoring programs play a central role in supporting FINRA’s mission of investor protection and market integrity.” “DBAs and Communications With the Public” were one of the findings highlighted. FINRA continues to find that many registered representatives are not compliant with FINRA Rule 3270 in trying to conceal their outside business activities. “FINRA observed that certain firms did not maintain sufficient WSPs and controls, or provide adequate disclosures regarding the use of DBA names.” 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? That is where our Eagle Eye application steps in. Our multi-query processes and dynamically designed algorithms provide more accurate online search results for you to quickly review. Our new “Risk-Based Review Process” provides added system intelligence, enhanced lexicon capabilities, system learning, and detailed evaluation of your search results. Eagle Eye automatically discovers your riskiest advisors and focuses your attention to where it’s needed. FINRA’s exam report also focused on registered representatives’ use of DBA names on their websites, social media accounts, seminars, and more that failed disclose they were working on behalf of a firm. FINRA also found many instances where there was no hyperlink to FINRA’s BrokerCheck. “Some registered representatives’ websites did not contain a “readily apparent reference” and hyperlink to FINRA’s BrokerCheck on the web pages that included the representatives’ professional profiles, as FINRA Rule 2210(d)(8)(A) (Communications with the Public) requires.” With precision our Eagle Eye application can find undisclosed websites, and social media accounts using the DBA names owned by your registered advisors. Enabling you to supervise and make sure that your advisors are following FINRA requirements. Then, our SQWatcher application can help you monitor, review, approve, and document changes made to your registered representatives’ websites. (Learn more about this application) These two applications become force-multipliers in your supervision program.
The annual FINRA Exam Findings Report is helpful for firms in bringing non-compliance issues to the forefront. It is a good time to reflect and examine on your own WSPs and supervisions procedures. With over 15 years of working in the financial industry, SiteQuest Technologies is an industry leader in providing innovative compliance and supervision software applications and website solutions for the financial industry. Contact us today with your DBA supervision concerns. Read the entire FINRA Exam Findings: http://www.finra.org/sites/default/files/2018_exam_findings.pdf Related Article: Are You Finding Everything You Need to Monitor?  One of our clients has been using the application for almost a year and described Eagle Eye as a “godsend.” Why? Since switching to Eagle Eye, this firm has:
With Eagle Eye’s automated searches, easy-to-use workflow and blacklisting technology, this client was able to do their reviews in a fraction of the time it took when doing it by hand. Not only has this time savings come in handy when it came to other projects, but they were also able to expand their supervision levels and are now looking deeper into the web through our application. It’s certainly turned into a “Win-Win-Win” situation that only required a small investment in a tool that now automates a process that used to be completely manual. Contact us today for a quick demo to see how Eagle Eye can not only save you time but also reduce your compliance risks.  |
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