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

  • 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
  • SEC Taking a Closer Look at Non-GAAP Financial Reporting According to Tatyana Shumsky at the Wall Street Journal, the Securities and Exchange Commission has increased efforts to regulate the use of accounting metrics that do not conform to the U.S. Generally Accepted Accounting Principles, known as non-GAAP.  The SEC’s endeavor began through its division of corporation finance, which issued new compliance guidelines and sent more non-compliance letters to companies than it had in the past.  More recently, the SEC’s enforcement division is getting involved and has been probing companies on their non-GAAP... More
  • SEC Chair to Step Down: Path Cleared for Deregulation The latest post-election domino has fallen.  Mary Jo White, the chair of the Securities and Exchange Commission, will step down at the end of the Obama administration.  White announced her departure on Monday, paving the way for Trump to implement his plan to deregulate the financial sector. In addition to replacing White, Trump will be able to fill two openings on the five-member commission, according to Renae Merle of the Washington Post.  Thus, it is clear that Trump will be able to... More
  • Dodd What Now that the election is over, it remains to be seen whether a Trump administration will do away with Dodd-Frank and dump the Department of Labor fiduciary duty rule as promised.  Come inauguration, all bets are off.  The one thing for certain is that the world for securities professionals will surely be changing come January.  Hold on for the ride.... More
  • So Who Wants Senior Clients In its never-ending effort to thwart senior investor fraud, FINRA recently proposed a new rule to the SEC. This proposal would require member firms to obtain the name of a trusted contact person for the customer’s account. The new rule would also allow firms to place temporary holds on the disbursement of funds or securities when there is a reasonable belief of exploitation, and notify the trusted contact of such a hold. This proposed rule is consistent with the advice I... More
  • A Data Breach! You Better Check The Law Of The States In Which You Have Customers Consistent with the ongoing guidance/requirements from the SEC and FINRA, all firms must have and enforce data security policies and procedures.  Even the best policies and procedures may, however, not protect the firm in every instance.  So what do you do if there is a breach? One of the most important things to determine is what law governs.  In other words, if you have clients in all 50 states, it is possible that there are 50 different data breach laws that... More
  • When just saying “no” is a good thing In the hectic world of financial services, registered representatives and investment adviser representatives are always looking to increase their assets under management. At what cost? Are there situations where you would be better off just saying no to accepting that one additional client? In my many years of defending representatives and advisers from customer complaints, the unqualified answer is yes; there are situations when you are better off just saying no. Any good risk avoidance program will provide for the proper... More
  • Why is Anyone Surprised with the SEC Examining Firms with Previously Disciplined Advisors? On Monday, September 12, 2016, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced that a “Supervision Initiative” will take place across the country. OCIE staff will conduct focused RIA examinations of firms employing or contracting with supervised persons, who have a disciplinary history.  OCIE plans to evaluate the effectiveness of RIA compliance programs, supervisory oversight practices, and disclosures to clients and prospective clients, concentrating on the potential risk disclosures arising from financial arrangements initiated by supervised persons with a disciplinary history.  OCIE’s justification for this targeted examination... More