During March 2020, one of the most streamed shows was Tiger King, a documentary about “Joe Exotic” a/k/a Joseph Allen Schreibvogel a/k/a Joseph Allen Maldonado-Passage, a “zoo owner [who] spirals out of control amid a cast of eccentric characters in this true murder-for-hire story from the underworld of big cat breeding:’1 Thus, Tiger King has much in common with the securities enforcement matters from March: fraud, broken rules, sanctions, and (arguably) eccentric characters. One big difference, of course, is that last month’s enforcement matters did not involve cat breeding, big or small. (We can’t make any promises about April’s enforcement actions.) Thus, the March enforcement matters present important lessons for broker-dealers and investment advisers (as well as important lessons for zoo owners, assuming that the zoo is an outside business activity).
Category Archives: Enforcement
Back to Office Guidance
From our friends at Hardin Compliance Consulting LLC, helpful guidance for broker dealers and RIAs, as they plan their return:
- Question & Answer Employer Guide: Return to the Work in the time of COVID-19 by Faegre Drinker.
- Making your Office Safe to Return after COVID-19 by Riia O’Donnell of Workest.
- Preparing for Reentry in the US by Goodwin Procter LLP.
- Reopening Your Doors – BakerHostetler’s Return to Work Toolkit
NJ Joins Other States to Protect Seniors, NASAA Warns Smaller Advisers about Cybersecurity Risks, SEC Settles Valuation, and Fund Expense & Wrap Fee Actions
June Regulatory Updates from Cari Hopsfenperger at Hardin Compliance Consulting LLC.
Topics include:
- New Jersey Adopts Its Own Senior Safe Legislation
- NASAA 2020 Investment Adviser Section Annual Report
- Notice to Members I-20-20: Coronavirus Update – Relief from Fingerprinting Requirements
- Notice to Members I-20-18: Amendments to NFA Compliance Rule 2-29 and Related Interpretive Notice Now Effective
- Broker-Dealer Recruiting Tactics Lead to Reg S-P Violations
- “May” I? No, You “May” Not! SEC Settles with Private Equity Adviser with Conflicted Expense Reimbursements
- Whoops! I Did It Again! Adviser Fails to Learn from Mistakes, Blows up Fund
- Five Million Reasons Why Wrap Fee Transparency is Important
- Mutual Fund Manager Misprices Odd Lot Bonds, Overstates NAV and Related Performance
SEC relief for advisers impacted by COVID-19
On March 13, 2020, the Securities and Exchange Commission (SEC) issued a temporary order (the Order) providing conditional exemptive relief to investment advisers registered with the SEC (RIAs) and exempt reporting advisers (ERAs) with respect to certain filing, delivery and reporting requirements under the Investment Advisers Act of 1940, as amended (the Advisers Act) due to disruptions and limitations caused by coronavirus disease 2019 (COVID-19). The Order provides impacted firms with conditional exemptive relief from these filing, delivery and reporting requirements in the form of an extension of up to 45 days from the originally required due date. RIAs or ERAs with filing, delivery or reporting obligations between March 13, 2020, and April 30, 2020 (the Period) may rely on the Order. The SEC noted it may extend the Order past April 30 and may issue other relief if warranted in the future.
To rely on the Order, RIAs and ERAs must satisfy the Order’s specified conditions. Detailed here.
The OCC’s 2019 annual report addresses anti-money laundering risks for financial institutions
The Annual Report summarizes the OCC developments against its 2019 strategic priorities, including its priority to reduce the burden of Bank Secrecy Act (BSA) and Anti Money Laundering (AML) compliance while protecting the financial system.
In 2019, the OCC, along with the other federal financial regulatory agencies, issued interpretive guidance statements on using collaborative arrangements to share resources to manage BSA/AML obligations, considering innovative technologies to meet BSA/AML compliance obligations, clarifying existing risk-focused approaches to examinations of financial institutions’ BSA/AML compliance programs, and clarifying suspicious activity report (SAR) filing requirements for banks providing financial services to hemp-related businesses.
The OCC appears very focused on encouraging banks to adopt innovative technologies to manage their BSA/AML compliance risks, and this trend should continue in 2020 as technological solutions evolve even further.
Additional contributor to this post: