Broker Dealer (BD) Compliance Services

Risk Management, Assessment, & Compliance Program Testing

The LeGaye Law Firm, P.C. is well equipped to assist broker-dealers (BD) in taking proactive steps required to identify, assess and reduce areas of risk. Part of the risk assessment process provided by the firm includes on-site mock regulatory testing of client systems and BD procedures. This independent third-party testing process is an important and integral part of the risk management and review necessary that broker dealers should incorporate in meeting their annual testing requirement. As part of the testing and risk assessment process, The LeGaye Law Firm, P.C., will evaluate the aspects of your business subject to regulatory compliance, including:

• Bookkeeping Records
• Account Ledgers
• Trading and Transaction Records
• New Account Applications
• Customer Complaints and Arbitration matters
• Associated Persons' and Representatives' Files
• Advertising and Marketing Materials
• Written Policies and Procedures Manuals
• Firm Registration Records
• Client Disclosure Documents and Privacy Notices
• Testing of Anti-Money Laundering Programs, Business Continuity Plans, Regulation S-P Controls and Other Compliance Programs
• Client Contracts and Account Files
• Supervisory Compliance Controls
• Processes for Evaluating Actual and Potential Conflicts of Interest and Mitigation of Conflicts
• New Products and Services, Including Processes for Business Development and Creation of New Policies and Procedures

Upon completion of the Firm's testing or risk assessment, you will be provided with an initial finding report , which will addresses any critical concerns requiring immediate action. Based upon the needs of our client's, the Firm is able to issue a final report that addresses the annual report occasioned by FINRA Rule 3130.

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Anti-Money Laundering Compliance

The LeGaye Law Firm, P.C. offers comprehensive regulatory advice, remediation services and risk management assessment relating to all aspects of anti-money laundering (“AML”) rules and regulations for broker-dealers and other financial institutions. Our firm can also provide comprehensive and diverse legal services including drafting AML policies and procedures, providing annual independent testing of AML programs and compliance-training related to best practices related to know your customer (KYC), Suspicious Activities Reports (SARs), Bank Secrecy reporting, and OFAC/Control list compliance. Finally, the firm can recommend technical solutions that will provide the most effective transaction monitoring and suspicious activity detection systems.

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Written Policies, Procedures & Internal Controls

The LeGaye Law Firm, P.C. assists financial services industry clients develop effective written policies, procedures and internal controls that help prevent abuses, detect and mitigate conflicts of interest, reduce firm risk and maintain legal compliance with protocols and regulatory requirements. This approach helps to define the roles and responsibilities of your senior management and supervisors while promoting successful business practices. To help accomplish this, ongoing counsel and support services offered by The LeGaye Law Firm, P.C., both directly and through its affiliations, may include legal advice regarding:

• Creation, Review or Enhancement of Written Supervisory Procedures (WSPs) or Written Policies and Procedures Manual
• Guidance on Constructing a "Chinese Wall," Supervising Interdepartmental Communications Communicating Restricted and Watch Lists
• Employee Training on New Policies and Procedures
• Development of Business Continuity Plan Documents
• Development of Anti-Money Laundering Policies and Procedures, Including an Annual Independent Audit
• Analysis of Best Execution Practices and Review of Best Execution Processes and Compliance with SEC and FINRA Recordkeeping
• Requirements
• Evaluation and Implementation of Recordkeeping and Document Retention Policies
• Review and Assessment of Privacy Policies and Procedures Regarding Safeguards for Protecting Confidential Client Information
• Analysis of Conflicts of Interest Processes
• Annual Testing of Policies, Procedures and Internal Controls, with Written Assessment Upon Request

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Financial Industry Contracts

The securities and financial industry requires contracts be negotiated, agreements drafted and records maintained, both for a business and regulatory function. As a result of The LeGaye Law Firm, P.C.'s extensive legal experience in broker/dealer issues, the firm brings a unique mix of industry and regulatory experience, which assists our clients avoid problems and efficiently implement and manage corporate agreements, contracts and other necessary forms of documentation.

Legal services offered include advice related to the negotiation and drafting of contracts or agreements and review of proposed or existing contracts, agreements and other documents to ensure legal compliance with current regulatory requirements. The following is a representative summary of some of the contracts and other legal documents The LeGaye Law Firm, P.C., can negotiate, draft, evaluate or revise:

• Broker-Dealer Client Contracts
• Broker-Dealer Selling Agreements
• Broker-Dealer Independent Contractor Agreements
• Broker-Dealer Employee Agreements
• Finder's Agreements
• Third-Party Service Provider Contracts
• Qualified Investor Subscription Agreements
• Limited Liability Agreements
• Operating Agreements
• Confidentiality Agreements

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Client Disclosure Documents

Regulatory authorities are scrutinizing client disclosure documents more closely than ever. The LeGaye Law Firm, P.C., offers proactive legal services designed to provide you with comprehensive yet customized disclosure documents in conformance with various legislative acts, including the Securities Act of 1933 and the Securities Exchange Act of 1934.

After evaluating existing client disclosure documents, the firm can provide an assessment of the findings along with recommendations on how to enhance current disclosure documents. The various legal disclosure documents the firm can draft, evaluate or revise include:

• Client Agreements and New Account Forms
• Offering Memoranda
• Private Placement Memorandums
• Advertising and Sales Literature
• Hedge Fund Disclosure and Client Documentation

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Regulatory Inquiry Responses

Response to inquiries from the SEC, FINRA or other regulatory bodies must be prompt, carefully considered and accurate in addressing each issue or deficiency, particularly if allegations of a securities law violation are involved.

The LeGaye Law Firm, P.C. understands our clients and knows their businesses, which enables us to provide prompt, effective responses to legal regulatory inquiries and allegations at both the state and federal levels. Having extensive experience in responding to SEC, FINRA and other official regulatory inquiries, the law firm is prepared to respond to your legal issues and claims, including regulatory inquires related to cycle and sweep examinations, improper trade practices, and/or disclosure issues.

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Financial and Operations Services

Daniel E. LeGaye, a principal in The LeGaye Law Firm, P.C., and has been registered with FINRA as a qualified Series 28 Financial and Operations Principal in excess of 20 years. As a result, Mr. LeGaye acts as a Financial and Operations Principal (FINOP) for a number of broker/dealers. The LeGaye Law Firm P.C., can also provide legal advice on financial issues, and, through its strategic relationships, have regular monthly, quarterly and annual financial filings prepared as legally required for broker-dealer by FINRA, the SEC, and other applicable regulatory authorities. Our Firm also provides on-site reviews of financial records to determine their compliance with the financial reporting, maintenance and financial issues facing a member firm of FINRA.

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Distribution and Structuring

Daniel E. LeGaye has represented broker-dealers on a variety of distribution and structuring matters, including legal advice on mergers and acquisitions, the public and private offering context for selling group managers and placement agents affiliated with REITs, mutual fund and variable annuity products, as well as the placement agents of private equity, venture capital and hedge fund interests in private offerings. Additionally, the firm has provided advise with respect to the due diligence obligations of broker-dealers with respect to the various products, both as a managing dealer and placing agent.

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Ongoing Industry Services

The LeGaye Law Firm, P.C., also provides broker-dealer legal counsel on the following issues:

• Structuring, implementation and co-coordinating of the annual review of the internal controls and supervisory procedures relied upon for regulatory compliance and sound risk management procedures and processes.
• Creation, review and analysis of corporate records, including by-laws, operating agreements and other legal documentation
• Create, review and analyze client legal documents (new account forms, privacy notices, prospectus receipts, 1035 exchange disclosures, quarterly performance reports, marketing disclosures, etc.)
• Creation and review of broker-dealer selling agreements
• Assessment of business continuity, disaster recovery and succession plans
• Due diligence of third-party service providers
• Due diligence of private placement products
• Advertising, research and communications with the public
• Gifts and entertainment issues
• Net capital and customer protection rules

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