Tag Archives: Corporation

FINRA Gift Policy Fights Fraudulent Business Practices

Market makers on Amsterdam Stock Exchange

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FINRA is the acronym for the Financial Industry Regulatory Authority. Although the name sounds governmental, FINRA is actually a private corporation that oversees brokers and markets dealing with stock exchanges. The goal of FINRA is to ensure ethical and fair trading practices throughout the nation. One of the ways FINRA works to meet this goal is through establishing policies around corporate gifts. The main point of the FINRA gift policy is that business related gifts should be under $100 in value.

The reason it is important to monitor corporate gifts is because they can lead to fraudulent behavior. Almost all publicly held companies are required to maintain a corporate gift policy to avoid potential fraud. Fraud occurs when a large dollar gift sways a business partner, customer, or vendor in a business decision.

A possible example of fraud can be seen in a relationship between a large broker and wealthy investor. The investor may want to ensure a certain stock does well for his own financial purposes. The investor might offer the broker season tickets for his favorite professional sports team or an all-expense paid ski week in Colorado. In exchange, the investor might want the broker to encourage clients to buy or sell stock the broker would not otherwise endorse. This represents a type of financial fraud.

Everyone can agree fraud of this type should not be allowed. However, when it comes to monitoring gift compliance, many companies run into trouble. Most companies must prepare a financial disclosure statement of some kind on a quarterly or yearly basis. Depending on the company, corporate gifting may need to be a part of this statement. Publicly traded companies often have hundreds or thousands of employees, and gathering data about gifts can be an enormous task.

Employing the use of an expense and finance tracking software will help companies keep track of spending. This includes expenses related to corporate gifts provided by employees within the company. Corporations may also require each team member to utilize the software to report gifts they received from outside sources such as vendors.

Careful record keeping through the use of good financial compliance software will help companies maintain compliance with FINRA gift policy and procedures. It will also make preparation of financial disclosure statements less stressful, more accurate, and lower labor costs associated with reporting.

Steps to Starting a Corporation


Forming a corporation is an important aspect of protecting your company. Although there are some con’s to it as well, the advantage of having company security and protection from legal liability as well as the attractive management structure of a corporation enables individuals to manage and succeed to their full potential.

Forming a corporation takes time, resources and the ability to pay attention to detail. The most important first step is to find a name that you will represent what you are selling. It should reflect what type of corporation you are running and the personality of your business as well. Whatever you choose, it needs to end with LLC, Inc., Ltd.

The directors of your corporation will be the following: Board members, directors and shareholders. It is imperative to choose your directors wisely as they will be the ones overseeing the operations, budget and making many of the major policies of your corporation. Each state will require a minimum number of directors in a corporation, although most states specify three directors for any corporation. Once you have chosen your directors, the next step will be going to the office of your Department of Secretary Of State, where you can file for your certificate of corporation.

Bylaws describe the laws and policies of the corporation, and should be drawn up by your lawyer, or one of the many reputable law firms in Boston. Having a Boston law firm put together bylaws that will benefit your corporation is instrumental in the success of your corporation’s management, organizational structure and to make sure every important aspect of the corporation is in writing. Some examples of bylaws including where and when shareholder meetings are held and various requirements of the shareholder’s position.

Obtaining the necessary documents and permits are necessary for any corporation, so it’s important to check with your state to ensure you haven’t missed any paperwork that need to be filled out and filed. Once you have completed these steps, your corporation can begin a long lasting and successful history of profit and service.