Regulatory Updates
The Securities and Exchange Commission (SEC) recently penalized a broker-dealer for failing to file Suspicious Activity Reports (SARs) as required under the Bank Secrecy Act.
FINRA recently fined two broker-dealers for failing to adequately supervise and monitor trading activities to detect and prevent potentially manipulative practices.
FINRA has issued an update detailing its ongoing efforts to monitor and regulate crypto asset-related activities among its member firms.
The Federal Trade Commission (FTC) has issued a final rule prohibiting businesses from creating, purchasing, or disseminating fake reviews and testimonials.
The Financial Industry Regulatory Authority (FINRA) recently took enforcement action against a broker-dealer for failing to adhere to the "Locate Requirement" under Rule 203(b)(1) of Regulation SHO.
The US Securities and Exchange Commission (SEC) has charged a trading platform operating in the over-the-counter (OTC) securities market for failing to comply with the Bank Secrecy Act (BSA) by not filing required Suspicious Activity Reports (SARs).
In 2024, we’ve witnessed a series of enforcement actions targeting cryptocurrency-focused fintech companies that provide legitimate services but fail to obtain proper licensing or registration.
The US Securities and Exchange Commission (SEC) has initiated a sweep examination targeting registered investment advisors (RIAs) to assess their compliance with the new T+1 settlement cycle rules.
The Corporate Transparency Act (CTA), a significant new regulation under US anti-money laundering laws, is approaching a crucial compliance deadline.
The US Securities and Exchange Commission (SEC) recently took enforcement action against a dually registered investment advisor and broker-dealer for failing to comply with Regulation Best Interest (Reg BI) requirements.
The Consumer Financial Protection Bureau ("CFPB") issued a Consent Order against a San Francisco-based fintech for allegedly withholding refunds beyond the 14-day window for closed accounts established in the Company's agreement with account holders.
The FTC recently took action against a bill payment company and its co-founders, accusing them of deceptive “junk fee” practices that harmed consumers.
FINRA has fined a broker-dealer firm alleging violations of rules regarding nontraditional exchange-traded products (NT-ETPs).
The firm failed to establish and maintain a supervisory system, including WSPs, reasonably designed to supervise the accuracy of order times on its order memoranda.
FINRA has fined a broker-dealer for charging unfair prices on 62 corporate bond transactions and six municipal bond transactions due to failing to consider the appropriate pricing information to determine the prevailing market price.
FINRA announced that it fined a firm $850,000 for social media posts made by influencers on the firm’s behalf that were not fair or balanced or contained exaggerated, unwarranted, promissory, or misleading claims.
In response to President Biden’s Executive Order authorizing increased data privacy measures, Assistant Attorney General Matthew G. Olsen announced that the National Security Division of the Department of Justice is implementing a data security protection and enforcement program.
In a recent speech, the head of SEC’s Enforcement Division, Gurbir Grewal, warned companies to ensure that “representations regarding your use of AI are not materially false or misleading.”
As part of a settlement with FINRA, a broker-dealer has agreed to pay a fine of $75,000 for failing to implement a reasonable supervisory system for business-related communications from January 2018 to June 2021.
FINRA has fined an online brokerage firm $700,000 for anti-money laundering (AML) failures from 2016 to 2022.
In mid-February, the FTC announced a proposed settlement to resolve allegations that security software company Avast unfairly sold consumers’ granular and re-identifiable browsing information. This was after Avast informed consumers that its software would protect their privacy and that any disclosure of their browsing information would only be in aggregate and anonymous form.
On March 13, 2024, the European Union’s parliament formally approved the EU AI Act, making it the world’s first major set of regulatory ground rules to govern generative artificial intelligence (AI) technology.
From January 2018 to present, a broker-dealer firm failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with rules governing outside business activities (OBAs). During this period, the firm failed to evaluate and document its evaluation of OBAs disclosed by its registered representatives as required by FINRA Rule 3270.
In a February 6, 2024 release, the Securities and Exchange Commission (SEC) adopted two new rules - Rules 3a5-4 and 3a44-2 - that expand the definition of “dealer” and “government securities dealer” under the Securities Exchange Act of 1934 (Exchange Act), requiring registration by market participants that take on significant liquidity-providing roles.
Last year, the U.S. Securities and Exchange Commission (SEC) proposed ambitious rules relating to artificial intelligence (AI) that have drawn significant commentary and criticism. While it is unlikely that any changes in the law are imminent, other initiatives by the SEC indicate that it is not willing to wait for those changes before addressing AI-related problems and risks it perceives.
While the EU GDPR regulates the international transfer of personal data, several recently enacted EU laws regulate the international transfer of non-personal data, which is any data that is not “personal data” under the GDPR.
Yesterday, the Financial Crimes Enforcement Network (FinCEN) published a proposal in the Federal Register to enact a federal standard for anti-money laundering (AML) and combating financing of terrorism (CFT) programs on U.S. Securities and Exchange Commission (SEC)-registered investment advisors (RIAs) as well as exempt reporting advisors (ERAs).
In a significant ruling on February 9, 2024, the California Court of Appeal reversed a trial court judgment that had stayed enforcement of California Consumer Privacy Act (CCPA) regulations. This decision will make certain CCPA regulations, which a court order had previously stayed, become immediately effective once again.
The firm’s reviews of customer execution quality failed to meet the reasonable diligence standard of FINRA Rule 5310 and the “regular and rigorous” review requirements of FINRA Rule 5310.09 from January 2014 to 2023. The firm neither admitted nor denied FINRA’s findings in resolving the matter.
The firm failed to establish and maintain a supervisory system reasonably designed to safeguard customer records and information in violation of Rule 30(a) of Regulation S-P.
The firm failed to establish and maintain a supervisory system. It failed to establish, maintain, and enforce written procedures reasonably designed to comply with the firm’s obligation to monitor transmittals of customer funds to third parties.
The firm failed to establish and maintain a supervisory system, including written procedures, to comply with the firm’s obligation to review correspondence and internal communications.
