In an unintended consequence of the Securities and Exchange Commission's (SEC) unprecedented rulemaking agenda, a black-hat hacker gang has filed a whistleblower complaint against its victim for not reporting a cybersecurity...more
In September, the Securities Exchange Commission’s new Cybersecurity Rule for reporting public companies became effective. The SEC Cybersecurity Rule applies to public companies and generally requires (1) disclosure of...more
9/29/2023
/ Corporate Governance ,
Cyber Incident Reporting ,
Cybersecurity ,
Disclosure Requirements ,
Financial Industry Regulatory Authority (FINRA) ,
Form 8-K ,
New Rules ,
Popular ,
Publicly-Traded Companies ,
Reporting Requirements ,
Securities and Exchange Commission (SEC)
A panel of the D.C. Circuit recently relied on Lucia and Cochran to enjoin a FINRA regulatory enforcement action pending appeal of an Appointments Clause challenge....more
8/21/2023
/ Administrative Law Judge (ALJ) ,
Appointments Clause ,
Article II ,
Article III ,
Constitutional Challenges ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Regulatory Reform ,
Motion To Enjoin ,
Popular ,
Regulatory Agencies ,
Regulatory Authority ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Seventh Amendment ,
Standing
On June 20, 2023, the Supreme Court granted certiorari to review three questions about the Securities and Exchange Commission’s (SEC’s) administrative courts...more
7/6/2023
/ Administrative Law Judge (ALJ) ,
Appointments Clause ,
Article II ,
Certiorari ,
Disgorgement ,
Enforcement Actions ,
Investment Adviser ,
Investment Funds ,
Public Rights Doctrine ,
SCOTUS ,
Securities and Exchange Commission (SEC)
Last week, a divided Securities and Exchange Commission adopted a set of rule changes requiring next-day (T+1) settlement of most equity trades by May 24, 2024. The suite of rules also require same-day trade allocations and...more
On July 27, 2022, FINRA filed a proposed rule change with the SEC that would “modernize” its supervision rule to make permanent pandemic-related temporary exemptions that allowed limited-scope work-from-home (“WFH”) for...more
On March 31, 2022, the Securities Industry and Financial Markets Association (“SIFMA”) released its after-action report on Quantum Dawn VI – a global financial-markets cybersecurity exercise....more
In the securities industry, regulators like to say that the compliance professionals are their “partners.” But every so often, those regulators charge one of their compliance partners with rule violations. The compliance...more
3/23/2022
/ Chief Compliance Officers ,
Compliance Management Systems ,
Cooperative Compliance Regime ,
Corporate Management ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Lead Supervisory Authority ,
Personal Liability ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Securities Violations
Continuing its active regulatory agenda, the Securities and Exchange Commission on March 9, 2022, proposed new cybersecurity regulations for reporting public companies. Although couched as a series of “disclosure”...more
3/10/2022
/ Corporate Governance ,
Cybersecurity ,
Data Breach ,
Data Privacy ,
Disclosure Requirements ,
Policies and Procedures ,
Proposed Rules ,
Publicly-Traded Companies ,
Regulatory Agenda ,
Risk Management ,
Securities and Exchange Commission (SEC) ,
Securities Regulation
In the 1920s, Wall Street cleared and settled trades by the end of the day after the trade instruction (“T+1”). Over the years, that cycle bloated to T+4, to T+3 in 1993, and then T+2 in 2017. Last week, the SEC proposed to...more
2/15/2022
/ Blockchain ,
Broker-Dealer ,
Capital Markets ,
Distributed Ledger Technology (DLT) ,
Peer-to-Peer ,
Proposed Rules ,
Regulatory Agenda ,
Regulatory Reform ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Securities Settlement Cycles ,
Securities Transactions
On February 9, the SEC proposed new cybersecurity risk management regulations for investment advisers, registered investment companies (funds), and business development companies....more
2/14/2022
/ Anti-Fraud Provisions ,
Business Development Companies ,
Comment Period ,
Cybersecurity ,
Data Protection ,
Disclosure Requirements ,
Fiduciary Duty ,
Identity Theft ,
Investment Adviser ,
Investor Protection ,
Policies and Procedures ,
Proposed Rules ,
Registered Investment Companies (RICs) ,
Regulatory Agenda ,
Risk Management ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Securities Regulation
Over the last couple of decades, the securities self-regulatory organization FINRA (f/k/a NASD) informs its membership each year of what compliance risks are noted by its examination program. Those are risks firms should...more
2/10/2022
/ Anti-Money Laundering ,
BSA/AML ,
Capital Raising ,
Compliance Monitoring ,
Crowdfunding ,
Cybersecurity ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Markets ,
Form CRS ,
Influencers ,
Municipal Securities Market ,
Regulation BI ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC) ,
Special Purpose Acquisition Companies (SPACs)
Resources -
What We Do And Don’t Know About The New COVID-19 Vaccination Mandates -
Since President Biden’s announcement on September 9, 2021 of plans for COVID-19 vaccination and/or weekly testing mandates, we have...more
11/1/2021
/ Business Licenses ,
Coronavirus/COVID-19 ,
Employer Mandates ,
Enforcement Actions ,
Federal Acquisition Regulations (FAR) ,
Federal Contractors ,
Gamification ,
Infectious Diseases ,
Regulation Best Interest ,
Safety Standards ,
Securities and Exchange Commission (SEC) ,
Securities Transactions ,
Vaccinations ,
Workplace Safety
In remarks this week at SEC Speaks, SEC Investor Advocate Rick Fleming mused that the “gamification” of securities trading might pose an undue risk that exploits a potential loophole in Regulation Best Interest (“Reg. BI”)....more
10/15/2021
/ Broker-Dealer ,
Cryptocurrency ,
GameStop ,
Gamification ,
Internet Memes ,
Investment Management ,
Regulation Best Interest ,
Regulation BI ,
Retail Investors ,
Securities and Exchange Commission (SEC) ,
SIFMA ,
Social Media ,
Stock Trades ,
Trading Policies
In remarks this week at the SEC Speaks conference, new SEC Enforcement Director Gurbir Grewal said he’s bringing back admissions in SEC settled actions to help spur accountability. Most SEC actions are settled on a “neither...more
This past Tuesday, September 21, the chorus calling for more regulation over crypto reached a sort of crescendo.
The SEC -
Earlier, in September 14 testimony before the Senate Banking Committee [1], former CFTC and current...more
9/23/2021
/ Anti-Money Laundering ,
BSA/AML ,
Cryptocurrency ,
Digital Currency ,
Financial Services Industry ,
Popular ,
Regulatory Agenda ,
Regulatory Oversight ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Unregistered Securities ,
Virtual Currency
On August 27, the Securities and Exchange Commission (“SEC”) issued a broad request for information and comments on “gamification” in financial-market user interfaces, including artificial intelligence and machine learning,...more
8/31/2021
/ Artificial Intelligence ,
Broker-Dealer ,
Comment Period ,
Digital Platforms ,
Financial Markets ,
Investment ,
Machine Learning ,
Regulatory Agenda ,
Retail Investors ,
Rulemaking Process ,
Securities and Exchange Commission (SEC)
The Financial Industry Regulatory Authority (“FINRA”) recently kicked off a “sweep” examination with its August 2021 Targeted Exam Letter on “practices and controls related to the opening of options accounts and related...more
On March 4, Acting Chair Allison Herren Lee announced the creation of a “Climate and ESG Task Force” of 22 members from across the Enforcement Division...more
The U.S. Securities and Exchange Commission (“SEC”) released its 2021 Examination Priorities on March 3. The Examinations group – elevated last December to Division status (formerly the Office of Compliance Investigations...more
3/5/2021
/ BSA/AML ,
Climate Change ,
Coronavirus/COVID-19 ,
Cybersecurity ,
Environmental Social & Governance (ESG) ,
FinTech ,
Infectious Diseases ,
Investment ,
Libor ,
OCIE ,
Regulation Best Interest ,
Retail Investors ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC)
The price of Bitcoin recently topped $57,000. New York’s Attorney General issued an Investor Alert on Virtual Currency Risks, as did the SEC’s Division of Examinations....more
In an SEC filing Friday, February 26, Robinhood Financial and Robinhood Securities disclosed they are negotiating with FINRA, the SEC, and state regulators, attempting to settle investigations into options-trading and outages...more
Acting SEC Chair Allison Herren Lee issued a February 24 statement directing the Commission Staff to review public-company climate-change-related disclosures. The Staff will assess current disclosures in light of the SEC’s...more
The Securities Industry and Financial Markets Association (“SIFMA”) recently proposed sweeping modernization of industry self-regulatory rules to reflect firms’ successful pivot to remote operations over the past year. SIFMA...more
Republican-appointee Commissioners Roisman and Peirce issued a statement on February 12 publicly disagreeing with Acting Chair Lee’s recent fiat discontinuing the Enforcement Division’s practice of proposing settlements that...more