A week after OCIE announced it would conduct a second round of cyber-security exams, the Commission emphasized the issue by bringing an enforcement action against a non-custodial investment-adviser over a remediated data...more
9/25/2015
/ Breach Notification Rule ,
Cyber Attacks ,
Cyber Crimes ,
Cybersecurity ,
Data Breach ,
Data Protection ,
Data Security ,
Enforcement Actions ,
Financial Institutions ,
Free Identity Theft Protection ,
Hackers ,
Investment Adviser ,
OCIE ,
Personally Identifiable Information ,
Popular ,
Securities and Exchange Commission (SEC) ,
SIFMA
Two rulings last week ordered the SEC to stop administrative proceedings in two cases, pending the Second Circuit’s ruling on the constitutionality of its administrative forum. The Second Circuit stayed the SEC’s prosecution...more
This week the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced a second-round of cybersecurity examinations, continuing its initiatives on the issue. The move follows the SEC’s: March 2014 roundtable...more
9/17/2015
/ Bring Your Own Device (BYOD) ,
Compliance ,
Corporate Governance ,
Cyber Attacks ,
Cybersecurity ,
Data Security ,
Due Diligence ,
Financial Institutions ,
Financial Markets ,
Incident Response Plans ,
Loss Prevention ,
OCIE ,
Risk Assessment ,
Securities and Exchange Commission (SEC) ,
SIFMA ,
Third-Party Service Provider
An SEC administrative law judge (“ALJ”) found that former Wells Fargo trader Joseph Ruggieri traded on material nonpublic information tipped him by former analyst Greg Bolan, but dismissed the insider-trading charges against...more
9/16/2015
/ Administrative Law Judge (ALJ) ,
Appointments Clause ,
Banking Sector ,
Banks ,
Due Process ,
Enforcement Actions ,
Fiduciary Duty ,
Financial Institutions ,
Financial Markets ,
Insider Trading ,
Material Nonpublic Information ,
Personal Benefit ,
Publicly-Traded Companies ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Seventh Amendment ,
Tippees ,
Wells Fargo
United States Deputy Attorney General Sally Q. Yates issued a September 9 memo directing increased focus on individual culpability in matters of corporate wrongdoing. The memo highlights six policy directives – some existing,...more
9/14/2015
/ Corporate Fines ,
Corporate Governance ,
Criminal Investigations ,
Department of Justice (DOJ) ,
Enforcement Actions ,
FBI ,
KPMG ,
Sanctions ,
Upjohn Warnings ,
Whistleblowers ,
White Collar Crimes ,
Willful Misconduct
The Municipal Securities Rulemaking Board (“MSRB”) announced September 2 that it has submitted for SEC approval proposed amendments extending its gift-limitations Rule G-20 to municipal advisors.
In general, the Rule...more
Unless you live under a rock, you’ve heard about “Deflategate:” The Patriots’ use of allegedly under-inflated footballs during their 45-7 win over the Colts in last-year’s AFC Championship. In a 40-page opinion issued...more
9/4/2015
/ Arbitration ,
Collective Bargaining ,
Confrontation Clause ,
Corruption ,
Criminal Prosecution ,
Deflategate ,
Evidence ,
Federal Arbitration Act ,
Football ,
Fraud ,
New England Patriots ,
NFL ,
Sixth Amendment ,
Tom Brady ,
Willful Misconduct ,
Work Suspensions
The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) issued a recent “Risk Alert” noting observed deficiencies in broker-dealer supervision and compliance controls over retail sales of structured products –...more
9/4/2015
/ Broker-Dealer ,
Brokers ,
Compliance ,
Due Diligence ,
Elder Issues ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Fixed Income Investments ,
Investment ,
Investors ,
OCIE ,
Risk Alert ,
Securities and Exchange Commission (SEC) ,
Structured Financial Products
In a September 2 Alert, FINRA warns that scammers are using messaging app spam-casts to impersonate brokers and tout micro-cap stocks to “pump” their prices, before “dumping” their positions at the top and leaving investors...more
9/3/2015
/ Brokers ,
Email ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Mobile Apps ,
Pump and Dump ,
Securities and Exchange Commission (SEC) ,
Social Media ,
Social Networks ,
Spam
In an August 18 letter to SEC Enforcement Director Ceresney, the National Society for Compliance Professionals (“NSCP”) urged the SEC to adopt an internal guideline requiring a higher “aiding and abetting” standard for...more
The District of Columbia Circuit Court of Appeals Tuesday rejected a challenge to the SEC’s investment-adviser pay-to-play rule, holding that two state Republican Party organizations filed it almost four years too late....more
The first Court of Appeals to rule in the recent round of challenges to the Securities and Exchange Commission’s administrative enforcement mechanism has held courts lack authority to consider the matter. The US Seventh...more
The District of Columbia Circuit Court of Appeals Tuesday rejected a challenge to the SEC’s investment-adviser pay-to-play rule, holding that New York and Tennessee Republican-Party organizations filed it almost four years...more
FINRA this week released its targeted exam letter requesting information on firms’ conflict-of-interest policies surrounding broker compensation and retail accounts.
The sweep follows up on FINRA’s Conflicts Report from...more
The Financial Institutions Regulatory Authority fined a UBS unit $750,000 for mistakenly reporting customers’ municipal-bond-account interest was tax-exempt, when the firm’s handling of the trades made it taxable instead....more
The Tennessee Court of Appeals at Jackson recently enforced a NY choice-of-law provision against an arbitration challenge, holding that courts determine contract-formation issues, while arbitrators decide the scope and...more
8/19/2015
/ Aiding and Abetting ,
Arbitration ,
Arbitration Agreements ,
Breach of Duty ,
Choice-of-Law ,
Embezzlement ,
Federal Arbitration Act ,
Interstate Commerce ,
Motion to Compel ,
Negligence ,
Non-Signatories ,
TN Supreme Court ,
Unconscionable Contracts
The MSRB responded August 12 to the SEC’s initiation of proceedings on proposed conduct standards for Municipal Advisors, filing some amendments to the proposed Rule. The MSRB’s Amendment No. 1: MSRB declined to make a number...more
Manhattan federal Judge Richard Berman yesterday (August 12) issued a preliminary injunction halting the SEC’s administrative action against former S&P executive Barbara Duka, holding the SEC’s in-house courts were “likely...more
The SEC instituted proceedings August 6 to allow additional time – and analysis – of the MSRB’s proposed Rule G-42 establishing broad conduct standards for municipal advisors. The Order essentially buys more time for the SEC...more
FINRA issued its late-July Regulatory Notice 15-27 warning brokerage firms that inadvertent short positions or fail-to-delivers in municipal securities trading can create situations where the member-firm pays a customer...more
8/4/2015
/ Brokerage Accounts ,
Compliance ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
IRS ,
Municipal Bonds ,
Municipal Securities Issuers ,
Municipal Securities Market ,
Regulatory Standards ,
Tax Deductions ,
Tax Exemptions
The SEC’s administrative forum has been under increasing scrutiny over the past year. Now the SEC has removed an ALJ from a high-profile case, after he refused the Commission’s “invitation” to provide a no-bias affidavit in...more
8/3/2015
/ Administrative Law Judge (ALJ) ,
Bebo v SEC ,
Bonds ,
CMBS ,
Dodd-Frank ,
Financial Markets ,
Rating Agencies ,
S&P ,
Securities and Exchange Commission (SEC) ,
Stocks ,
Wall Street Journal
The Department of Justice appealed the Second Circuit’s Newman decision to the U.S. Supreme Court, after several extensions. United States v. Newman, No. 15-137 (U.S. filed July 30, 2015). Last December’s ruling narrowed the...more
Last week the US Chamber of Commerce, through its Center for Capital Markets Competitiveness, issued a white paper proposing wide-ranging changes to the SEC’s enforcement process. Most of the 28 recommendations were...more
In mid-June, SEC Commissioner Gallagher issued a strongly-worded public dissent from two enforcement actions against investment-adviser CCOs, accusing the Commission of “cutting off its nose to spite its face” by punishing...more
SEC Administrative Law Judge Grimes dismissed administrative charges against an investment adviser and its principals for allegedly failing to disclose material conflicts of interest in its Form ADV and willfully filing false...more