The Beck Law Firm, LLC Blog

Mary Jo White Nominated to Head SEC

Yesterday, January 24, 2013, President Obama nominated former US Attorney in New York, Mary Jo White, to serve as the next chairman of the US Securities and Exchange Commission.  Her nomination goes to the US Senate for confirmation.  

2013 Regulatory Priorities

FINRA recently issued its Annual Regulatory and Examination Prioritites Letter, highlighting areas of regulatory focus and concern this year.  This is a must read for all compliance and legal folks, and it is a good read for any registered person as well.  It is always good to know what has the attention of the regulators.  Forewarned is forearmed.

Obviously, regulators will investigate, and take action on, items not on this list.  They are still interested in the standard, basic sales practice, market regulation or membership violations, but the letter highlights some issues for which, in light of recent exam findings and the market environment and business climate, the regulators have concerns.  In the sales practice area, some highlighted areas include: suitability of complex products, data integrity and cyber-security, microcap fraud, private placements, anti-money laundering, automated investment advice, and branch office supervision.  Several other areas are mentioned, so go ahead and click on the link and read the letter for yourself.  

Reminder: Friday is the Webinar: 10 Things to Do (Or Not Do ) To Help Avoid Regulatory Problems in 2013

This Friday, January 18th is the date for the first of our 2013 webinars.  Registration for the January 18, 2013 webinar/teleconference entitled, "10 Things to Do (Or Not Do) To Help Avoid Regulatory Problems in 2013" is now up and running.  Space is limited, so reserve your spot for this webinar and teleconfernce now, and put January 18, 2013 at 2PM Eastern on your calendar.  This free program will help stockbrokers and financial advisors understand  - and hopefully learn how to avoid - some major regulatory problems that they can inadvertently get themselves into.  By avoiding regulatory and compliance problems, brokers are better able to focus on serving their clients, growing their business, and enjoy their work.  

I hope to see you on the call/webinar on January 18th.  To get your spot, register today.  And, then be sure to check our email newsletter and BDLawBlog for future events in 2013.  

The Fiscal Cliff Legislation and Estate Planning = Good News

When Congress passed the American Taxpayer Relief Act of 2012 last week to resolve the so-called fiscal cliff, they made some significant changes to the estate tax system that will greatly benefit a majority of Americans.  

Under the existing law, the estate tax exemption (the unified credit) was set to automatically drop from about $5 Million in 2012 to $1 Million in 2013, and the tax rate on estates greater than $1 Million would have increased as well to a maximum tax rate of about 55%, if my memory is correct.  An exemption of only one million would have ensnared many Americans, as it doesn't take much - a house, some life insurance, and some modest retirement and savings - to exceed that amount.  

Now, based on this new legislation, the exemption (the unified credit) is pegged at $5 Million, indexed to inflation (so this year will likely be around $5.25 million or so), and the estate tax is set at 40%.  

There are some other good developments in this legislation for estate tax issues.  First, the change is permanent, or at least until other legislation is passed to change it.  This is significant because the last few changes had sunset provisions ending the law and requiring Congress to do something.  Second, the unified credits (the exemptions) are portable among spouses.  So, the portion of the unified credit that is not used by the spouse that dies first, can be added to the credit for the second spouse if properly elected by the executors.  This means that more people will be suitable for basic estate planning tools given the larger, and portable, credits.  

 

FINRA Seeks Comment on Recruitment Compensation Disclosure Rule

FINRA has published Regulatory Notice 13-02 seeking public comment on a rule proposal that would require disclosure of recruitment compensation when a broker moves from one firm to another, and receives, for example, a forgivable loan or a bonus based on production, transition expenses or bonuses, or other compensation as defined under the proposal.  Interestingly enough, the proposed framework of the new rule does not require disclosure of ALL additional compensation a rep. might receive.  For example, the receipt of a higher payout would not have to be disclosed.

The comment period expires March 5th, and I think it will be interesting to see what types of comments - and from where - are submitted.  I could see that big firms might be in favor of such proposal if they think this will drive down recruiting packages, but I imagine that the brokers who might avail themselves of recruiting packages would not be in favor of the proposal.  But beyond that, I wonder if this is really a solution in search of a problem?  After all, there are other rules to deal with the standard conflicts of interest that might arise here, including suitability rules and the like.  

We're Hiring - The Beck Law Firm, LLC Is Searching For a Part Time Legal Assistant

2013 is starting off to be a great year.  With the firm's move to the historic old courthouse square area in Lawrenceville, GA, we have a need for a new part-time administrative assistant position.  If you are interested, or know of someone that might be, please take a look at the info. below.  

Breaking News: Estate Tax Law Modified with "Fiscal Cliff" Legislation

As most readers of BDLawBlog already know, these past 48 hours have been busy with legislation in both houses of Congress to address the alleged "fiscal cliff" that we apparently fell from on January 1, 2013.  Last night, the House passed the Senate amendment to an older House bill that would serve to modify tax rates and provisions, as well as to delay the sequestration of spending cuts.

Under the new legislation, once it is signed by the President, the estate tax law scheme will change.  Upon signing into law, the estate tax exemption will not be back to a low $1 Million mark effective 1/1/13,  but will be back to $5 Million, along with an index for inflation.  And, based on what I've seen so far, this is a permanent change, not another two year modification that Congress did in the past.

I'll be reading the text of the bill and will report back with another update later this month. But for now, know this:  if your estate wasn't taxable on 12/31/12, it likely won't be taxable on 1/1/13, assuming the legislation is signed into law by the President.  Of course, taxes aren't the primary driver for the need for folks to do estate planning.  Parents of minor-aged children, with assets of any size, have a critical need for planning to make sure that their children will be taken care of, and raised by the appropriate folks, should something happen to the parents.  If you've got any estate planning questions or needs, please contact The Beck Law Firm, LLC today.