The Division of Examination’s (former OCIE) annual announcement of its exam priorities is always noteworthy, as it provides helpful insight into this division’s thinking and can serve as a roadmap for regulated entities to...more
3/10/2021
/ Anti-Money Laundering ,
Biden Administration ,
Climate Change ,
Cryptocurrency ,
Digital Assets ,
Environmental Social & Governance (ESG) ,
FinTech ,
Innovation ,
Investment Adviser ,
Libor ,
Market Infrastructure ,
OCIE ,
Regulation Best Interest ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC)
On January 8, 2021, without admitting or denying the findings, VALIC Financial Advisors, Inc., (VALIC) entered into a settlement with FINRA Enforcement, through an Acceptance, Waiver and Consent (AWC) where the factual...more
As the cannabis industry continues to evolve and generate capital raising and investment opportunities, the SEC Division of Enforcement will continue to closely keep watch and target the bad actors that new market...more
1/27/2021
/ Accounting ,
Bad Actors ,
Broker-Dealer ,
Cannabis-Related Businesses (CRBs) ,
Capital Raising ,
Compliance ,
Enforcement Actions ,
Futures ,
Insider Trading ,
Investors ,
Marijuana Related Businesses ,
Securities and Exchange Commission (SEC) ,
Supervision
Closing out 2020, the SEC’s Division of Examinations (OCIE) issued a Statement on Recent and Upcoming Regulation Best Interest Examinations. There the Division of Examinations announced its intention “to begin its next phase...more
On January 18, 2021, the incoming President’s Transition Team announced additional key administration post nominees, including Mr. Gary Gensler as SEC Chair. The announcement specifically provided the following regarding Mr....more
1/20/2021
/ Administrative Proceedings ,
Biden Administration ,
Broker-Dealer ,
Compliance ,
Hedge Funds ,
Insider Trading ,
Investment Adviser ,
New Legislation ,
Private Equity ,
Publicly-Traded Companies ,
Securities and Exchange Commission (SEC) ,
Supervision
Congress recently overrode President Trump’s veto of the $740 billion 2021 National Defense Authorization Act (“NDAA”) and signed it into law. While the focus of the NDAA is not on the U.S. Securities and Exchange Commission...more
1/12/2021
/ Disgorgement ,
Equitable Relief ,
Extensions ,
Investment Advisers Act of 1940 ,
Kokesh v SEC ,
NDAA ,
SCOTUS ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Statute of Limitations
Last week, on December 16, 2020, Chinese-based coffee chain Luckin Coffee Inc. (“Luckin”) agreed to a $180 million settlement with the United States Securities and Exchange Commission (“SEC”). Luckin’s American Depositary...more
12/23/2020
/ Anti-Fraud Provisions ,
China ,
Compliance ,
Earnings Management ,
Financial Reporting ,
Foreign Entities ,
Foreign Issuers ,
Fraud ,
Investigations ,
Investors ,
Scienter ,
Securities and Exchange Commission (SEC) ,
Settlement ,
Supervision
In a 30-day period, the U.S. Securities and Exchange Commission (“SEC”) has released guidance in three ways regarding certain views on the important role and potential liability risks of chief compliance officers (“CCOs”)....more
The U.S. Securities and Exchange Commission (SEC) hosted a virtual roundtable in late October to discuss the Regulation Best Interest (Reg BI) and Form CRS. With a few months of observations from examinations since the June...more
The number of public company and accounting fraud cases filed under SEC Chair Jay Clayton has declined. The SEC, however, continues to selectively pursue these types of cases. In the latest example, in aggressive parallel...more
On October 8, 2020, the U.S. Securities and Exchange Commission (SEC) released a joint statement by SEC Chairman Jay Clayton and the SEC’s directors of the Division of Investment Management and the Division of Trading and...more
On September 25, 2020, the SEC filed a civil injunctive action against a microcap company, Arrayit Corp., and its President and Chief Science Officer for falsely stating in March-April 2020 that Arrayit had developed a...more
On September 28, 2020, the U.S. Securities and Exchange Commission (the “SEC”) announced two settlements against public companies and individual charges against the former controller and chief accounting officer and the...more
Recently, the U.S. Securities and Exchange Commission (the “SEC”) charged a dually registered firm and its Chief Compliance Officer (“CCO”) with multiple violations of the Investment Advisers Act of 1940 (“Advisers Act”). The...more
What’s New, and Comings & Goings at the SEC -
What’s New: The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) recently issued a Risk Alert titled “Select COVID-19 Compliance Risks and Considerations for...more
8/27/2020
/ Broker-Dealer ,
Business Continuity Plans ,
Compliance ,
Enforcement ,
Fees ,
Financial Transactions ,
Investment Fraud ,
Investors ,
OCIE ,
Risk Alert ,
Securities and Exchange Commission (SEC) ,
Supervision
While the U.S. Supreme Court’s decision in Liu v. SEC limited the SEC’s disgorgement power, it also left open certain complicated issues that are now subject to interpretation. As we previously summarized, in an 8–1 vote, the...more
8/27/2020
/ 15 U.S.C. § 78u(d)(5) ,
Administrative Authority ,
Business Expenses ,
Calculation of Damages ,
Corporate Misconduct ,
Disgorgement ,
Enforcement Actions ,
Equitable Relief ,
Kokesh v SEC ,
Lack of Authority ,
Liu v Securities and Exchange Commission ,
Net Profits ,
Remedies ,
SCOTUS ,
Securities and Exchange Commission (SEC)
In a pair of settlements announced on July 28, 2020, the SEC charged VALIC Financial Advisors (the “Firm”) with two separate sets of violations that allowed the Firm to obtain millions of dollars in fees without providing...more
8/27/2020
/ Advisors Act ,
Cash Solicitation Rule ,
Disclosure Requirements ,
Enforcement ,
Financial Adviser ,
Internal Revenue Code (IRC) ,
Investment Adviser ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Violations ,
Share Classes ,
Teachers ,
Unions
SEC Chairman Jay Clayton has repeatedly touted his focus on “Main Street.” In doing so, he unleashed the Division of Enforcement’s Asset Management specialty unit on the investment advisory industry and finalized and...more
On June 26, 2020, the U.S. Court of Appeals for the Second Circuit issued its ruling on the challenge to the legality of the Regulation Best Interest final rule (Reg BI), promulgated by the U.S. Securities and Exchange...more
On June 22, 2020, the U.S. Supreme Court decided Liu v. Securities and Exchange Commission, holding the SEC may recover disgorgement as a form of equitable relief in a civil enforcement action for securities fraud, provided...more
6/25/2020
/ 15 U.S.C. § 78u(d)(5) ,
Administrative Authority ,
Business Expenses ,
Calculation of Damages ,
Corporate Misconduct ,
Disgorgement ,
Enforcement Actions ,
Equitable Relief ,
Kokesh v SEC ,
Lack of Authority ,
Liu v Securities and Exchange Commission ,
Net Profits ,
Remedies ,
SCOTUS ,
Securities and Exchange Commission (SEC)
A three-judge panel of the Second Circuit entertained arguments on June 2, 2020, in a lawsuit seeking to vacate and set aside the Securities and Exchange Commission’s (SEC’s) Regulation Best Interest (Reg BI). By way of...more
From mid-March to mid-May, the SEC received more than 4,000 tips, complaints, and referrals. This, according to one of the SEC Co-Directors of the Division of Enforcement, represented a 35% increase over the same period last...more
As we described several weeks ago, the SEC across the agency is going to be vigilant in its efforts to regulate, examine and enforce the federal securities laws regarding coronavirus/COVID-19. More recently, the SEC Division...more
The SEC has issued guidance addressing the Form CRS. The first is a Risk Alert from the Office of Compliance Inspections and Examinations (OCIE) indicating that OCIE will be looking for good faith compliance when it conducts...more
On April 7, 2020, the Securities and Exchange Commission (SEC) Office of Compliance Inspections and Examinations (OCIE) issued a Risk Alert providing guidance for the SEC’s post–June 30, 2020, examinations of firms’...more