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FINRA scrutinizes firms that accepted PPP loans for possible rule violations

January 26, 2021

FINRA is examining brokers who received a loan through the Paycheck Protection Program, a federal government program intended to provide relief to small businesses impacted by the coronavirus pandemic. According to data released by the Small Business Association, which administered the loans, more than 1,400 wealth management firms received loans of at least $150,000.

Foreside’s Stephen Murphy, Managing Director shares with Financial Planning’s Ryan Neal that given the sense of panic during the spring, some companies may have taken loans out under the name of a parent company to keep it off the books of a FINRA-regulated broker-dealer entity.

“Decisions weren’t always well-documented, applications were sometimes read with bleary eyes, and upon retrospect, perhaps different interpretations might be made now,” Murphy says.

Click here to learn more about Stephen’s concern for firms who took the loans and how they should consider FINRA rules directly focused on capital requirements.