Blog – Securities Compliance Sentinel

https://securitiescompliancesentinel.foxrothschild.com/

The highly regulated securities and financial industry has a host of complex problems—and financial institutions often find themselves on the receiving end of audits, investigations and other compliance issues. Our team of seasoned securities attorneys share their knowledge and experience to address cutting edge industry issues. Join them in their exploration of this increasingly complex area.

Recent Blog Posts

  • Ed Raleigh Publishes Mail and Wire Fraud Article Our colleague Ed Raleigh in our DC office has published an insightful article on Mail and Wire Fraud in the ABA’s Criminal Justice Magazine.  We invite you to read it.  ... More
  • SEC’s Exam Deficiencies The SEC recently released its findings relating to exams of investment advisers.  https://www.sec.gov/ocie/Article/risk-alert-5-most-frequent-ia-compliance-topics.pdf. In particular, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) found weak compliance programs; insufficient or late filings; custody rule violations; Code of Ethics problems; and the often used books and records issues. OCIE, in fact, criticized the use of non-particularized, “off-the-shelf” manuals, nearly non-existent annual reviews, and plain and simple failure to implement or follow procedures.  Form ADV and Form PF filings also included inaccurate information or were late.  Investment advisers were also found... More
  • Compliance Issues The SEC Is Seeing The Office of Compliance Inspections and Examinations (or OCIE) recently issued a Risk Alert that identified the five most frequent compliance topics that arising from OCIE examinations. These compliance topics include the following: Deficient compliance programs, Late or insufficient filings, Violations of the custody rule, Code of Ethics compliance deficiencies, and Books and records. Among other things, OCIE noted that it continues to see untailored “off-the-shelf” manuals, deficient or non-existent annual reviews, as well as the systemic failure to follow procedures. So what does this all... More
  • Trump Sets Plan In Motion To Dismantle Dodd-Frank According to Bloomberg, Trump plans to order a review of Dodd-Frank, with an eye to significantly scale back the regulations.  Trump also plans to do away with the “fiduciary rule”, which requires retirement account advisers to perform in the best interests of their clients. This confirms Trump’s goal to loosen regulations in the financial services industry.  While the Dodd-Frank review will not have an immediate impact, Trump’s order will stall the fiduciary rule from going into effect this April.  Trump is... More
  • One Man’s Rogue Broker Is Another Man’s Treasure Like it has in the past, FINRA is sharply focused on examining brokers with a disciplinary past, including the identification and examination of such brokers being placed at the top of its 2017 exam priorities. Does this mean that firms cannot hire brokers with a past? The short answer is no, but the longer is a bit more involved. A FINRA examination team is going to be conducting a quantitative analysis to review the broker’s test scores, number of prior employers... More
  • What Do You Need To Know About New York And Cybersecurity? On March 1, New York will go live with cybersecurity rules for financial service providers such as banks, insurance companies and others subject to the Department of Financial Services’ jurisdiction. At its core, the rules require these entities to have cybersecurity programs directed to consumer protection. New York firms must now have written policies and procedures, as well as a designated chief information security officer to oversee, train, enforce the program and report hacking to the state. Any report of hacking... More
  • What’s the Deal with Data Breach insurance? A recent Investment News article highlighted a burgeoning market for financial advisors looking to protect their practices; namely, data breach insurance. Although such insurance seems like a great idea, you need to exercise due care when purchasing such insurance. According to the article, more and more firms are buying this insurance to supplement any gaps that may exist in regular D&O insurance. After all, the typical D&O insurance policy either does not cover or provides little coverage for the harm caused... More
  • SEC Chair White Refuses To Delay New Rules According to Fortune, outgoing Securities and Exchange Commission Chair Mary Jo White is refusing to delay adoption of new rules and regulations.  Senate Republicans–in particular the Senate Banking Committee’s top two Republicans, Chairman Richard Shelby and Mike Crapo–requested White delay adopting new rules until after Trump takes office.  However, as reported by Reuters, White responded to Shelby and Crapo on December 12th, stating that she intends to move forward with derivative reforms mandated by Dodd-Frank, including capital and margin requirements for... More
  • What are you doing to prevent a data breach A broker-dealer recently agreed to pay a $650,000 fine after an OSJ’s cloud vendor failed to adequately protect customer information. Apparently, an outside hacker was able to gain access to non-public personal information about the firm’s customers. This breach and resulting fine should certainly serve as a wake-up to all firms, but, in particular, to smaller firms. These firms are those who are more likely to use outside vendors to maintain cost, but are at greater risk. If anything, this fine only... More
  • More Departures Announced by Top SEC Officials Following up on our earlier report that Mary Jo White, the chair of the Securities and Exchange Commission, will step down at the end of the Obama administration, news of other departures within the SEC has begun to spread.  The latest is Keith Higgins, head of the Division of Corporation Finance, who announced his plans to leave the SEC in January.  According to Sarah N. Lynch at Reuters, Higgins was oversaw the adoption of many rules pursuant to the 2012 Jumpstart Our... More