Compliance, Enforcement, Regulatory, Standard of Care

Department of Labor’s Fiduciary Proposal 3.0

July 9, 2020 Clifford E. Kirsch, Editor Leave a comment

In an important development, the Labor Department has issued a new proposal to address conflicted investment advice provided by ERISA fiduciaries:

Consonant with the vacatur of its 2016 rule, DOL reinstated the longstanding 5-part test of investment advice fiduciary status, but announced new interpretations of that test that will cause rollover advice and possibly other interactions to become fiduciary advice.
DOL also proposed a new, principles-based class exemption broadly available for conflicted advice and intended to align with other bodies of law to which financial institutions are subject.

Entering Another New Normal: Regulatory Updates for July 2020

July 5, 2020 Cari Hopfensperger Leave a comment

June Regulatory Updates from Cari Hopsfenperger at Hardin Compliance Consulting LLC.

Topics include:

Reg BI and Form CRS are here! Now what?
Did you know that June 15th was World Elder Abuse Awareness Day (WEAAD)?
Form CRS and the Land of Oz…State considerations for Form CRS
West Virginia Enacts Senior Safe Legislation
Temporary Relief extended for In-Person Board Meetings
Another Adviser Nailed for Inadequate Handling of Material Nonpublic Information
The Fat Lady Has Not Sung Yet… the SEC Continues its Crusade against “Inadequate Disclosure” of Mutual Fund Fees
Former RIA COO Barred from Industry

Read the full update here.

Compliance, Enforcement, Standard of Care

The Last Dance (But not the Last Enforcement Action): SEC and FINRA Enforcement Actions in April 2020

June 15, 2020 Clifford E. Kirsch, Editor Leave a comment

In April 2020, one of the most-watched television shows was the beginning episodes of ESPN’s “The Last Dance,” a 10-part documentary chronicling Michael Jordan and the 1997-98 Chicago Bulls. The documentary explores the ups and downs of the Bulls during Jordan’s last year as a Bull, and their successful attempt at a second three-peat. While the show doesn’t address securities enforcement cases directly (or, frankly, at all), it does provide a lot of lessons that compliance officers and others can think about as they are sitting at home during the age of coronavirus assessing enforcement actions and how they may impact their firms. Like so much in life, if you watch this series in just the right way, you’ll learn more than you would have expected.

Learn more here.

Compliance, Standard of Care

Strict Liability Has No Place In ‘Should Have Known’ Case

June 11, 2020 Clifford E. Kirsch, Editor Leave a comment

In a May 21, brief filed with the U.S. Court of Appeals for the D.C. Circuit in Thaddeus North v. U.S. Securities and Exchange Commission, the SEC turned “should have known” liability into a strict liability standard.[1] The D.C. Circuit should not apply this interpretation.

Read why here

Compliance, Enforcement, Standard of Care

Tiger King: Murder, Mayhem, and March 2020 Enforcement Matters

June 8, 2020 Clifford E. Kirsch, Editor Leave a comment

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).