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Primary Care Providers Win Challenge of CMS Interpretation of Enhanced Payment Law

With the help and support of the Tennessee Medical Association, 21 Tennessee physicians of underserved communities joined together and retained Bass, Berry & Sims to file suit against the Centers for Medicare & Medicaid Services to stop improper collection efforts. Our team, led by David King, was successful in halting efforts to recoup TennCare payments that were used legitimately to expand services in communities that needed them. Read more

Tennessee Medical Association & Bass, Berry & Sims

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Healthcare Private Equity Compliance Checklist

The complex and ever-changing healthcare regulatory and enforcement environment, including increased focus on the role of private equity firms in their portfolio companies, make compliance a top priority for private equity firms investing in healthcare companies. The best way to limit your exposure as a private equity firm is to avoid a compliance misstep in the first place. Additionally, an effective and robust compliance program for your portfolio healthcare company makes it much more attractive to potential buyers and helps you avoid an unexpected and costly investigation or valuation hit down the road. Download the Healthcare Private Equity Compliance Checklist to assess whether your portfolio company's compliance program is up-to-date.

Click here to download the checklist.

$300,000 Regulatory Settlement Highlights Firms' Supervisory and U4 Reporting Obligations

Firm Publication


March 8, 2016

A member firm's culture of compliance must include procedures designed to ensure the firm's associated persons' CRD filings are timely, accurate and complete. FINRA By-Laws require associated persons to promptly disclose to FINRA reportable U4 and U5 events, including, but not limited to, regulatory actions, customer complaints, bankruptcy filings, liens, judgments and criminal charges.1 Rule 3010 has long required firms to maintain WSPs "reasonably designed to achieve compliance" with applicable laws and rules, including keeping associated persons' U4/U5 filings current. 

In 2014, as part of its efforts to ensure associated person compliance and increase transparency, FINRA began making sweeping changes to its supervision rules, amending Rule 3010 (and renumbering it as Rule 3110) to require member firms to verify the accuracy and completeness of their associated persons' U4 disclosures.2 The changes were highlighted in FINRA's 2015 Regulatory and Examinations Priorities Letter and required member firms to "establish and implement written procedures reasonably designed to verify the accuracy and completeness of the information contained in" the U4s of new applicants and experienced associated persons moving their registrations to new firms.3 On a parallel track, FINRA examined public financial records for all registered persons and also notified "a handful of firms" that it had "flagged cases where a firm's brokers had liens and judgments that were never reported."4

The gravity of failing to meet this disclosure-related obligation is apparent in last week's announcement by FINRA of a $300,000 settlement with, and censure of, RBC Capital Markets, LLC ("RBC").5 FINRA found: (1) "RBC Failed to Amend and Timely Amend Firms U4 to Report Unsatisfied Liens and Judgments;" and (2) "RBC Failed to Establish a Supervisory System to Review Wage Garnishment Orders for Reportable Events." The findings stem from the firm's receipt of 71 wage garnishment orders among its 5,300 registered representatives during a 2 ½ year period and its failure to "conduct a sufficient inquiry to determine if the underlying event … should have been reported on the affected individual's Form U4." In 26 instances the required amendment was never filed, and in another 15 instances the amendment was untimely. FINRA also found the firm did not have sufficient WSPs governing the review of wage garnishment orders so the firm could determine if the garnishment involved a reportable event and take appropriate disclosure steps as required.

This action serves as a reminder that firms must adopt and implement reasonable procedures to verify that their associated persons' disclosures are timely, accurate and complete.

1 See FINRA By-Laws Article V, Section 2(c) and Form U4
4 FINRA Going After Firms For Unreported Judgments, Liens by Megan Leonhardt, (March 16, 2015), available at

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