The SEC and CFTC recently charged 11 large financial institutions and their affiliates for failing to collect, monitor, and preserve communications over WhatsApp and other messaging services. These settlements follow a...more
10/7/2022
/ Affiliates ,
CFTC ,
Civil Monetary Penalty ,
Enforcement Actions ,
Financial Institutions ,
Government Investigations ,
Instant Messaging Apps ,
Investment Adviser ,
Recordkeeping Requirements ,
Securities and Exchange Commission (SEC) ,
Settlement ,
Social Media ,
WhatsApp
This article focuses on how the new Rule 206(4)-1 (the “Marketing Rule”) under the Investment Advisers Act of 1940 (the “Advisers Act”) affects the relationships between investment advisers registered with the U.S. Securities...more
10/4/2022
/ Advertising ,
Broker-Dealer ,
Compliance ,
Disclosure Requirements ,
Endorsements ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Marketing ,
New Rules ,
Policies and Procedures ,
Private Funds ,
Registered Investment Advisors ,
Risk Alert ,
Securities and Exchange Commission (SEC) ,
Testimonial Statements
CFTC Commissioner Christy Goldsmith Romero recently criticized the agency’s longstanding practice of settling enforcement cases without seeking admissions of wrongdoing (so-called “no-admit/no-deny” settlements). She suggests...more
The North American Securities Administrators Association (NASAA), an organization of state and provincial securities regulators in the United States, Canada, and Mexico, recently issued an investor advisory warning...more
The SEC recently brought fraud charges against Sterlington, Louisiana and its former mayor and separately against Rochester, New York and its former executives and Rochester’s municipal advisors and principals/owners...more
9/1/2022
/ Enforcement Actions ,
False Statements ,
Misrepresentation ,
Municipal Bonds ,
Municipal Securities Issuers ,
Municipalities ,
Rule 10(b) ,
SEC Examination Priorities ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Violations
SEC staff recently served up a juicy staff bulletin covering the standards of conduct for broker-dealer and investment adviser conflicts of interest. The staff bulletin includes 13 Q&As categorized into five different...more
FINRA recently proposed amendments to FINRA Rule 3110 (Supervision) to adopt a voluntary, three-year pilot program (Pilot Program) to allow member firms to conduct remote branch office inspections. In a nod to where...more
8/17/2022
/ Broker-Dealer ,
Data Collection ,
Financial Industry Regulatory Authority (FINRA) ,
Inspections ,
Pilot Programs ,
Proposed Amendments ,
Public Comment ,
Remote Proceedings ,
Risk Assessment ,
Securities and Exchange Commission (SEC) ,
Supervision
Are the SEC and FINRA setting up shop in the metaverse? Not quite yet, but we stress yet! Like private sector businesses, U.S. financial services regulators are increasingly exploring what the metaverse, augmented...more
8/4/2022
/ Augmented Reality ,
Business Strategies ,
Compliance ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Regulatory Agencies ,
Metaverse ,
Popular ,
Regulatory Requirements ,
Remote Banking ,
Securities and Exchange Commission (SEC) ,
Virtual Reality
Back in April 2022, we wrote about the SEC killing the Dealer/Trader distinction. We also noted then that it would come as no surprise to see the SEC re-propose amendments to Exchange Act Rule 15b9-1. Just a few months later,...more
BrokerCheck is the database through which FINRA publishes licensing, registration, and disciplinary history of brokerage industry firms and their personnel. BrokerCheck does not currently specify whether a particular firm is...more
On July 21, 2022, the SEC charged three individuals with insider trading of digital assets via a scheme to trade ahead of multiple announcements regarding crypto assets being made available on a United States-based digital...more
7/25/2022
/ Criminal Conspiracy ,
Crypto Exchanges ,
Cryptoassets ,
Department of Justice (DOJ) ,
Digital Assets ,
Enforcement Actions ,
Howey ,
Indictments ,
Material Nonpublic Information ,
Securities ,
Securities and Exchange Commission (SEC) ,
Wire Fraud
In March 2022, the U.S. Securities and Exchange Commission proposed rules that would greatly expand the Exchange Act definition of “dealer” and essentially kill the distinction between dealers and traders long-recognized by...more
7/15/2022
/ Cryptocurrency ,
Decentralized Finance (DeFi) ,
Digital Assets ,
Executive Orders ,
Financial Industry Regulatory Authority (FINRA) ,
Joe Biden ,
Market Participants ,
Proprietary Trading ,
Securities and Exchange Commission (SEC) ,
Securities Dealers ,
Securities Exchange Act
On June 22, 2022, the U.S. Securities and Exchange Commission (“SEC” or “the Commission”) released its Spring 2022 "Reg Flex" agenda. The regulatory agenda, set by Chairman Gary Gensler, provides a glimpse into how the agency...more
The U.S. Securities and Exchange Commission recently charged a broker-dealer and five of its registered representatives with violating Regulation Best Interest (“Reg. BI”) related to recommendations and sales of an unrated,...more
On June 16, 2022, the U.S. Senate confirmed Jaime Lizárraga and Mark Uyeda as SEC Commissioners. Once seated, the agency will have a full slate of five commissioners for the first time in six months, following the departure...more
Cybersecurity and technology governance remain a top area of focus for the SEC and FINRA, as the regulators continue to concentrate on improving the overall cybersecurity posture and resiliency of the financial sector. FINRA...more
6/15/2022
/ Cyber Incident Reporting ,
Cybersecurity ,
Enforcement Priorities ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Services Industry ,
Governance Standards ,
Policies and Procedures ,
Popular ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC)
After years of relative silence related to variable annuity exchanges on the regulatory front, the U.S. Securities and Exchange Commission announced last week settled charges against RiverSource Distributors, Inc...more
It came as no surprise that FINRA’s 2022 Examination and Risk Monitoring Program Report highlighted communications with the public as a continued area of focus. The primary theme across this focus area relates to the...more
On May 4, 2022, FINRA announced that it had fined two FINRA-registered funding portals a combined $1.75 million for failing to comply with securities laws and rules designed to protect crowdfunding investors. Funding portals...more
5/12/2022
/ Broker-Dealer ,
Crowdfunding ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Fines ,
Funding Portal ,
Internal Controls ,
JOBS Act ,
Regulation CF ,
Securities Act of 1933 ,
Securities Exchange Act
On May 9, 2022, the SEC extended the comment periods for proposed rulemaking on climate-related disclosures and reopened the comment period for proposed rulemaking relating to private funds and what it means to be an...more
The SEC recently published its 2022 Examination Priorities Letter on the heels of FINRA issuing its 2022 Examination and Risk Monitoring Program Report. One of many areas of common focus is financial management, and more...more
Securities law enforcement entered the metaverse recently in the form of an emergency cease and desist order issued by the Texas State Securities Board against individuals and a company using NFTs to finance multiple...more
4/22/2022
/ Casinos ,
Cease and Desist Orders ,
Failure To Disclose ,
Fraudulent Concealment ,
Gambling ,
Metaverse ,
Non-Fungible Tokens (NFTs) ,
Securities Regulation ,
Securities Violations ,
Texas ,
Unregistered Securities
U.S. Securities and Exchange Commission staff recently published a bulletin reiterating the standards of conduct applicable to broker-dealers and investment advisers when making account recommendations to retail investors....more
4/15/2022
/ Broker-Dealer ,
Conflicts of Interest ,
Fiduciary Duty ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
IRA Rollovers ,
Regulation Best Interest ,
Retail Investors ,
Retirement Plan ,
Securities and Exchange Commission (SEC) ,
Standard of Conduct
The SEC Division of Examinations recently published its list of priorities for 2022. While it was a bit late compared to a typical year, the priorities letter provides a roadmap for firms to better understand where the...more
4/8/2022
/ Alternative Trading System (ATS) ,
Broker-Dealer ,
Conflicts of Interest ,
Cryptoassets ,
Emerging Technologies ,
Environmental Social & Governance (ESG) ,
Fiduciary Duty ,
Form CRS ,
Information Security ,
Investment Adviser ,
Private Funds ,
Regulation BI ,
Regulation SHO ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC) ,
Unregistered Brokers
The SEC recently proposed rules that would greatly expand the Exchange Act definition of “dealer” and essentially kill the existing dealer/trader distinction long-recognized by the SEC. The likely outcome is that most...more