Category Archives: Enforcement

SEC’s amendments to Rule 10b5-1 and new state privacy laws — ACA Regulatory Updates

February Regulatory Updates from Cari Hopfensperger at ACA Group:

Topics include:

  • News for All Firms
    • SEC Amends Rule 10b5-1 Restricting Insider Trading
    • State Privacy “Class of 2023” – Several New Privacy Laws Taking Effect
  • News for Investment Advisers
    • 10 States Now Require IARs to Complete Annual Continuing Education
    • Form 13F Amendments to Make Data More Usable Take Effect
  • News for CPOs/CTAs
    • NFA Reminds Members to Confirm Exemption Status of Entities They Do Business With
  •  Lessons Learned
    • SEC Fines Service Provider $5 Million for Securities Fraud: Service Providers Beware!
    • I’m Ready for My Close-Up: Former PM Leverages Investment to Get His Daughter in the Movies
    • Adviser Keeps Revenue Sharing on the Down Low – and Gets SEC Smackdown

Read more here.

SEC’s Division of Examinations 2023 Priorities

The SEC’s Division of Examinations recently released its Examinations Priorities 2023 report.  In fiscal year 2022, they examined approximately 15% of the registered investment adviser population, and over 360 broker-dealers examinations, and, together with FINRA, they examined nearly half of the approximately 3,500 registered broker-dealers in fiscal year 2022.  They continue to focus on their “four pillars”:  (1) promote compliance; (2) prevent fraud; (3) monitor risk; and (4) inform policy.

ACA’s take on the priorities can be found here.

 

 

SEC’s 2024 Investor Advocate Objectives Report

Section 4(g) of the Securities Exchange Act of 1934 (Exchange Act), 15 U.S.C. § 78d(g), requires the Investor Advocate to file two reports per year with the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives.  A Report on Objectives is due no later than June 30 of each year, and its purpose is to set forth the objectives of the Investor Advocate for the following fiscal year. This report contains a summary of the Investor Advocate’s primary objectives for Fiscal Year 2024, beginning October 1, 2023. A Report on Activities is due no later than December 31 of each year, and it describes the activities of the Investor Advocate during the preceding fiscal year. For Fiscal Year 2023, the activities and accomplishments of the Office will be reported not later than December 31, 2023. Here is a link to the FY24 Report on Objectives

Enforcement appears as messages disappear part II: Steep penalties imposed in personal messaging cases

Sixteen firms settled with the Securities and Exchange Commission and Commodity Futures Trading Commission for failing to maintain and preserve business-related communications.

  • Total civil penalties for these settlements and similar actions brought in December 2021 exceed $2 billion.
  • The settlements stem from a risk-based investigation into whether broker-dealers, swap dealers, and other registrants are retaining business-related communications made on personal devices.
  • Companies can take certain proactive measures now to ensure their record retention policies and controls sufficiently mitigate risk stemming from employee use of text messaging applications, including third-party platforms such as WhatsApp, on their personal devices.

Read more here.