On Aug. 7, the U.S. District Court for the Southern District of New York issued its judgment in U.S. Securities and Exchange Commission v. Ripple Labs, Inc., marking the end of district court- level proceedings in the highly...more
8/12/2024
/ Civil Monetary Penalty ,
Corporate Counsel ,
Cryptocurrency ,
Digital Assets ,
Enforcement Actions ,
Pending Litigation ,
Permanent Injunctions ,
Popular ,
Ripple ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Summary Judgment ,
Unregistered Securities
In connection with the Biden Administration’s ongoing crackdown on corruption, tax havens, and illicit financing, on December 11, Treasury released a Fact Sheet on its “efforts to address the illicit finance and national...more
Chair Gensler Continues to Be Outspoken About the Risks of AI Technologies -
Chair Gensler’s warnings of the potential risks associated with the use of AI technologies in the securities industry recently continued with...more
Back in 2021, the FTC announced substantial changes to the Rule that imposed more detailed and rigorous security requirements for covered financial institutions and was largely based on the New York State Department of...more
For years, the SEC has focused on broker-dealers complying with all applicable AML and financial sanctions laws and regulations, including the BSA and its implementing regulations. For example, in 2021, the Division issued a...more
Chair Gensler’s Public Statements Warning of AI’s Impact on Securities Industry -
In his speech before the National Press Club, Chair Gensler focused on the tremendous opportunities AI technology presents but cautioned...more
8/8/2023
/ Analytics ,
Artificial Intelligence ,
Bias ,
Broker-Dealer ,
Compliance ,
Conflicts of Interest ,
Data Privacy ,
Intellectual Property Protection ,
Investment Adviser ,
Machine Learning ,
Proposed Rules ,
Public Statements ,
Securities and Exchange Commission (SEC)
The SEC’s Cybersecurity Proposals -
The SEC has proposed four rules designed to address cybersecurity risk and management, including incident reporting by public companies....more
7/21/2023
/ Board of Directors ,
Broker-Dealer ,
Corporate Governance ,
Corporate Management ,
Cybersecurity ,
Disclosure Requirements ,
Enforcement Actions ,
Investment Adviser ,
Investment Companies ,
Oversight Duties ,
Policies and Procedures ,
Proposed Rules ,
Publicly-Traded Companies ,
Risk Assessment ,
Risk Management ,
Securities and Exchange Commission (SEC)
On July 13, 2023, the U.S. District Court for the Southern District of New York issued its highly anticipated summary judgment decision in the U.S. Securities and Exchange Commission’s (SEC) action against Ripple Labs, Inc....more
Reconciling Recordkeeping Requirements Against the Prudence of Data Remediation -
As we have covered in previous alerts, the SEC and other regulators have intensified their scrutiny of the retention of electronic...more
On May 1, 2023, the New York State Department of Financial Services (DFS or Department) issued a consent order (Consent Order), imposing a $1.2 million fine on bitFlyer USA, a cryptocurrency trading platform and custodial...more
5/17/2023
/ BitLicense ,
Compliance ,
Consent Order ,
Crypto Exchanges ,
Cryptocurrency ,
Cybersecurity ,
Enforcement Actions ,
Enforcement Priorities ,
Financial Regulatory Agencies ,
Licenses ,
Licensing Rules ,
NYDFS
As discussed in our alert following the oral argument in this case, in Ciminelli v. United States, a construction company executive named Louis Ciminelli appealed his wire fraud conviction in connection with bid rigging...more
Background and Scope -
The Assessment was drafted by Treasury’s Office of Terrorist Financing and Financial Crimes (“TFFC”), in consultation with multiple U.S. agencies, including the Departments of Homeland Security,...more
As discussed more fully in our alert when Blaszczak I was issued, the crux of this case was that four individuals were charged with and convicted of an alleged scheme to obtain nonpublic information from the Centers for...more
1/27/2023
/ Centers for Medicare & Medicaid Services (CMS) ,
Criminal Conspiracy ,
Criminal Convictions ,
Criminal Prosecution ,
Dirks v SEC ,
Insider Trading ,
Kelly v United States ,
Legal History ,
Material Nonpublic Information ,
Medical Reimbursement ,
Personal Benefit ,
Property Ownership ,
Remand ,
Tippers ,
Vacated
On January 4, 2023, the New York State Department of Financial Services (“DFS”) announced that Coinbase, Inc., a major U.S. cryptocurrency exchange, will pay a $50 million penalty and invest an additional $50 million in its...more
1/17/2023
/ Anti-Money Laundering ,
Bank Secrecy Act ,
Coinbase ,
Compliance ,
Consent Order ,
Crypto Exchanges ,
Customer Due Diligence (CDD) ,
Cybersecurity ,
Enforcement Actions ,
Government Investigations ,
Know Your Customers ,
Money Transmitter ,
NYDFS ,
Office of Foreign Assets Control (OFAC) ,
Regulatory Violations ,
Settlement ,
Statutory Violations ,
Virtual Currency
In recent years, the U.S. Supreme Court has narrowed the scope of various federal criminal fraud statutes. For example, in McDonnell v. United States, the Court overturned the honest services fraud conviction of the former...more
12/23/2022
/ Bid Rigging ,
Bribery ,
Chris Christie ,
Construction Industry ,
Criminal Code ,
Criminal Convictions ,
Fraud ,
Government Officials ,
Insider Trading ,
Right to Control ,
SCOTUS ,
Wire Fraud
Under the updated Rule, FIs are obligated to implement data security measures that will protect against data breaches and cyberattacks in order to prevent financial harm to consumers, including identity theft and loss of...more
On Nov. 3, 2022, the SEC announced a consent order against a registered investment adviser (RIA) and its chief executive officer (CEO) for failing to reasonably supervise one of the RIA’s investment adviser representatives...more
The Marketing Rule seeks to address evolving changes in advertising and referral practices in the industry – particularly with respect to the use of the Internet, mobile applications, and social media – by providing an...more
11/4/2022
/ Advertising ,
Compliance ,
Electronic Communications ,
Endorsements ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Investors ,
Marketing ,
Ratings ,
Registered Investment Advisors ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC)
On October 11, 2022, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) announced a $29 million civil monetary penalty against Bittrex, a...more
10/25/2022
/ Bank Secrecy Act ,
BSA/AML ,
Civil Monetary Penalty ,
Compliance ,
Consent Order ,
Crypto Exchanges ,
Cryptocurrency ,
Enforcement Actions ,
FinCEN ,
Office of Foreign Assets Control (OFAC) ,
Statutory Violations
As part of a coordinated effort with the U.S. Secretary of State, Attorney General, Secretary of Commerce, Secretary of Homeland Security, Director of the Office of Management and Budget, Director of National Intelligence,...more
10/17/2022
/ AML/CFT ,
Anti-Money Laundering ,
Anti-Terrorism Financing ,
Banking Sector ,
Biden Administration ,
Digital Assets ,
Executive Orders ,
FATF ,
Financial Transactions ,
Regulatory Reform ,
Risk Mitigation ,
Virtual Currency
On September 29, 2022, FinCEN issued a final rule requiring most corporations, limited liability companies and other entities created in or registered to do business in the United States to report information regarding their...more
10/7/2022
/ Anti-Money Laundering ,
Beneficial Owner ,
Board of Directors ,
Compliance ,
Corporate Officers ,
Corporate Transparency Act ,
Domestic Corporations ,
Final Rules ,
Financial Regulatory Agencies ,
FinCEN ,
Foreign Corporations ,
Reporting Requirements ,
U.S. Treasury
On Sept. 16, 2022, the White House released a Fact Sheet providing key findings and action items arising from the nine reports addressing digital assets that have been submitted to the president to date consistent with the...more
9/23/2022
/ Biden Administration ,
Central Bank Digital Currency (CBDCs) ,
Cryptocurrency ,
Digital Assets ,
Environmental Protection Agency (EPA) ,
Executive Orders ,
Financial Services Industry ,
Financial Stability Board ,
Innovation ,
Non-Fungible Tokens (NFTs) ,
OECD ,
U.S. Commerce Department ,
U.S. Treasury
Takeaways -
..U.S. Securities and Exchange Commission (SEC, or Commission) Chair Gary Gensler reaffirmed his view that the “vast majority” of cryptocurrency tokens are securities, and recent agency enforcement actions...more
Non-fungible tokens (NFTs) often involve two areas with known money laundering and terrorist financing risks: cryptocurrencies and high-value assets, like art. As detailed below, the U.S. Treasury Department’s Financial...more
Significant parallel actions commenced this week by the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) bring crypto fraud enforcement into the spotlight, with the SEC alleging that multiple...more
7/25/2022
/ Coinbase ,
Criminal Prosecution ,
Cryptoassets ,
Department of Justice (DOJ) ,
Digital Wallets ,
Enforcement Actions ,
Ethereum ,
Howey ,
Illegal Tipping ,
Indictments ,
Insider Trading ,
Material Nonpublic Information ,
Proposed Rules ,
Rule 10(b) ,
Rule 10b-5 ,
Rulemaking Process ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Tokens ,
Securities Violations