Subject to Inquiry

Subject to Inquiry

THE LATEST ON GOVERNMENT INQUIRIES AND ENFORCEMENT ACTIONS

Government Investigations and White Collar Litigation Group

Alexander Madrid

Photo of Alexander Madrid Alex has a broad range of litigation and regulatory experience representing financial institutions and other corporate clients, with a specific focus on representing broker-dealers in regulatory and enforcement actions, arbitration, and litigation.

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FINRA’s Important Reminder to Firms—Don’t Forget to Supervise Third-Party Vendors

By Cheryl Haas, Alexander Madrid, Aline McCullough, McGuireWoods LLP and Government Investigations Group on Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Securities and Commodities
Overview Broker-dealers, like most companies, rely on third-party vendors for a wide variety of functions.  This common practice of outsourcing does not relieve a broker-dealer of its regulatory compliance and supervision obligations over the outsourced functions.  Accordingly, management and supervision of third-party vendors present important issues that merit careful attention from regulatory, compliance, and legal… Continue Reading

A New Avenue for Defendants in Securities Fraud Class Actions: Supreme Court Holds “Generic” Nature of Statements Is “Important Evidence” of Price Impact at Class Certification

By Alexander Madrid, Molly White and Garrett Hooe on Securities and Commodities
Monday, the U.S. Supreme Court issued a highly anticipated ruling holding that the generic nature of an alleged misrepresentation may be important evidence of price impact to rebut the Basic presumption of reliance and thus should be considered at class certification. See our post on the Class Action Countermeasures blog.… Continue Reading

Another Cop on the Beat? CFP Board Signals Increased Enforcement Focus

By Alexander Madrid, Cheryl Haas and McGuireWoods LLP on Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation
Financial advisors have long used the Certified Financial Planner designation as an indicator to potential clients that they meet high standards of professionalism and ethics within their field.  The Certified Financial Planner Board of Standards, Inc. (the “CFP Board”), which grants the designation, markets it as demonstrating that its holder meets strict ethical standards.  Yet… Continue Reading

OCIE Finds Supervision Failures at Multiple-Branch Office Investment Advisers

By Elizabeth J. Hogan, Alexander Madrid, McGuireWoods LLP and Government Investigations Group on Compliance, Financial Institution Regulation, Securities and Commodities
On November 9, 2020, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced the results of its examination of nearly 40 SEC-registered investment advisers that operate multiple branch offices (the “Risk Alert”). Most of the firms examined conducted their advisory business out of at least 10 branch offices. OCIE observed a wide range of… Continue Reading

Ready or Not, Prepare to Start Answering Questions About Reg BI Compliance

By Cheryl Haas, Alexander Madrid, Aline McCullough and Government Investigations Group on Financial Institution Regulation
On June 5, 2019, the SEC adopted Regulation Best Interest (“Reg BI”), which requires broker-dealers and associated persons to make recommendations regarding securities transactions (or investments involving securities) that are in the “best interest” of their retail clients. The SEC also adopted Form CRS, requiring broker-dealers and investment advisers to provide a brief relationship summary… Continue Reading

North American Securities Administrators Association (NASAA) Releases Model Cybersecurity Rule

By Alexander Madrid, Cheryl Haas and Government Investigations Group on Compliance
On May 21, the North American Securities Administrators Association (NASAA)—an organization comprised of 67 securities regulators within the United States (all fifty states as well as districts and territories), Canada, and Mexico—released a model cybersecurity rule package governing state-registered investment advisors’ cybersecurity and privacy practices.  The model rule package, which would need to be adopted… Continue Reading

SEC OCIE Highlights Potential Deficiencies in Firm Privacy Policies

By Alexander Madrid, Cheryl Haas and Government Investigations Group on Securities and Commodities
On April 16, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) issued a Risk Alert highlighting Regulation S-P compliance deficiencies and issues it found in recent examinations of broker-dealers and investment advisers. Regulation S-P is the primary SEC rule detailing the safeguards these firms must take to protect customer privacy. The Risk Alert provides… Continue Reading

Recent New Jersey Rule Proposal Progresses State Efforts to Impose Fiduciary Duties on Brokers

By Alexander Madrid, Government Investigations Group and McGuireWoods LLP on Financial Institution Regulation, Securities and Commodities
On April 15, the New Jersey Bureau of Securities (the “Bureau”) issued a rule proposal to establish a uniform fiduciary duty standard applicable to investment advisers, brokers-dealers and their registered representatives and agents.  Specifically, the proposed rule (N.J.A.C. 13:47A-6.4), which could take effect as early as the end of the year, will require all investment… Continue Reading

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