The North American Securities Administrators Association, Inc. (NASAA) reported the results of a coordinated broker-dealer examination program conducted by state securities agencies over the period of January 1, 2012 through June 30, 2012. During those examinations, 236 examinations were conducted in 24 jurisdictions.
The examinations found 453 types of violations in five compliance areas. Those areas with the greatest frequency of violations were:
- Books and records (29 percent)
- Supervision (27 percent)
- Sales practices (24 percent)
- Registration and licensing (14 percent)
- Operations (6 percent)
The most common types of violations found were: failure to follow written supervisory policies and procedures, suitability, correspondence/e-mail, maintenance of customer background information and lack of or adequate internal audits.
According to former NASAA president, Jack E. Herstein, the purpose of the coordinated examination program and the release of its results is to provide broker-dealers with essential information in order to improve upon their compliance requirements and ultimately provide improved client services.