Subject to Inquiry

Subject to Inquiry

THE LATEST ON GOVERNMENT INQUIRIES AND ENFORCEMENT ACTIONS

Government Investigations and White Collar Litigation Group

Tag Archives: SEC

Financial Institution Regulation

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

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
Financial Institution Regulation

SEC Adopts Regulation Best Interest

On June 5, 2019, the Securities and Exchange Commission adopted, by a 3-1 vote, Regulation Best Interest (“Reg BI”) which, in the words of Chairman Clayton, would “substantially enhance the broker-dealer standard of conduct beyond existing suitability obligations.” The Chairman also noted: “the standard of conduct draws from key fiduciary principles and cannot be satisfied… Continue Reading
Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Securities and Commodities

SEC Charges Its First Robo Actions – Increasing Scrutiny of the Investment Platform

It was never a question of if, but rather, when the Securities and Exchange Commission would launch its first charges against robo-advisors and what those charges would be. Following then-SEC Chairperson, Mary Jo White’s keynote address at the SEC-Rock Center on Corporate Governance in 2016, regulators have been carefully monitoring robo-advisors’ compliance with the Investment… Continue Reading
Enforcement and Prosecution Policy and Trends

SEC Launches Self-Reporting Initiative for Investment Advisers

In line with Chairman Jay Clayton’s oft-stated priority of protecting the long-term interests of Main Street investors, on Feb. 12, 2018, the Securities and Exchange Commission’s Division of Enforcement announced the launch of a new self-reporting initiative for investment advisers. This new initiative — the Share Class Selection Disclosure Initiative — aims to address undisclosed… Continue Reading
Enforcement and Prosecution Policy and Trends, Securities and Commodities

SEC to Begin Regulating Initial Coin Offerings More Heavily

On November 16, 2017, U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton announced in a symposium on cybersecurity and financial crimes that the SEC would start taking enforcement action against coin offering issuers who fail to register with the SEC. As cryptocurrencies, like Bitcoin, have become increasingly popular, startup companies have turned to a… Continue Reading
Enforcement and Prosecution Policy and Trends, Securities and Commodities

U.S. Supreme Court Rules Time Limits Apply to SEC Disgorgement Orders

A unanimous United States Supreme Court held Monday, in Kokesh v. Securities and Exchange Commission, that the five-year statute of limitations under 28 U.S.C. § 2462 applies to disgorgement sought by the Securities and Exchange Commission. Previously, the Circuits had been split on this issue. The issue in Kokesh was straightforward. Kokesh appealed a trial… Continue Reading
Anti-Money Laundering, Enforcement and Prosecution Policy and Trends, Securities and Commodities

SEC Opens Cease-and-Desist Order Proceeding against Broker-Dealer and Chief Compliance / AML Officer

As we have highlighted in prior posts, regulators of financial institutions, including FinCEN, FINRA and SEC, have increasingly brought actions to bring organizations – and individuals – into compliance with AML / BSA obligations.  This enforcement activity is consistent with FinCEN’s August 2014 Advisory, now nearly three years old, emphasizing the idea that U.S. financial institutions… Continue Reading
Compliance

McGuireWoods Announces Updated Government Investigations Resource Guide

We are pleased to announce that McGuireWoods LLP has published the seventh edition of its Government Investigations Resource Guide. While Subject to Inquiry provides detail on the latest news and regulatory trends, this guide serves as a handy reference tool for in-house attorneys, compliance officials, and executives. The Guide features overviews for key areas of… Continue Reading
Compliance, Election and Political Law

Congress Votes to Disapprove SEC’s Resource Extraction Disclosure Rule

In previous posts, we discussed the potential impact of the SEC’s Resource Extraction Payment Disclosure (Rule 13q-1), including possible FCPA implications and the development of an appropriate compliance plan. After the election, much attention has been given by Congress to the so-called “midnight” agency rules that were adopted in the final months of the Obama… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends

SEC: $7 Million Award to be Split by Three Whistleblowers

On Monday, January 23, 2017, the Securities and Exchange Commission (SEC) awarded more than $7 million to be split among three whistleblowers.  The three individuals helped the SEC in its investigation and prosecution of an investment scheme. The identity of whistleblowers is protected by law however, the SEC did disclose that the primary whistleblower will… Continue Reading
Anti-Bribery and Corruption, Compliance, Energy Enforcement

A Compliance Plan for the Extractive Industries Payment Disclosure Rule

In the prior post we described the SEC’s new Rule 13q-1 that took effect on Monday (September 26). In this post, we discuss steps covered companies should take to comply with the rule. To review: Rule 13q-1 requires issuers involved in the commercial development of oil, natural gas and minerals to disclose payments they, their… Continue Reading
Enforcement and Prosecution Policy and Trends

SEC Announces Settlement with Investment Advisory Firm Regarding Alleged Failure to Disclose Costs to Investors

On July 14, 2016, the Securities and Exchange Commission announced the settlement of an enforcement action against RiverFront Investment Group (“RiverFront”), an investment advisory firm, for failing to properly prepare clients for transaction costs. At issue is a wrap fee program, in which a subadviser uses a sponsoring brokerage firm to execute their trades on… Continue Reading
Compliance

SEC Loses Chief of the SEC’s Office of the Whistleblower

On Friday, July 8, 2016, the Securities and Exchange Commission (SEC) announced Sean McKessey, Chief of the SEC’s Office of the Whistleblower, will be leaving his post by the end of the month.  Jane Norberg, Deputy Chief of the SEC’s Office of the Whistleblower will serve as Acting Chief until a replacement is found. McKessey… Continue Reading
Anti-Bribery and Corruption, Enforcement and Prosecution Policy and Trends

SEC Highlights Model Response to Evidence of FCPA Violations, Announces Non-Prosecution Agreements

On June 7, the Securities and Exchange Commission (SEC) announced two non-prosecution agreements (NPAs) following a pair of investigations into alleged violations of the Foreign Corrupt Practices Act (FCPA).  Both companies were ensnared by the FCPA through the conduct of their foreign subsidiaries.  The way the companies responded to the apparent violations provides a potential… Continue Reading
Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Securities and Commodities

A Circuit Split is Born. Eleventh Circuit Rules Declaratory Relief and Disgorgement Sought by the SEC Are Subject to 5-Year Statute of Limitations. Injunctive Relief is Not.

On May 26th, the Eleventh Circuit held that declaratory relief and disgorgement sought by the SEC are subject to the 5-year statute of limitations under 28 U.S.C. § 2462, but injunctive relief is not.  The court’s holding that § 2462 applies to disgorgement creates two circuit splits:  one with the D.C. Circuit, which has held… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends, Securities and Commodities

The SDNY Provides Guidance on a Company’s Duty to Disclose Government Investigations

Due to the absence of instructive case law and interpretative guidance from the U.S. Securities and Exchange Commission (SEC), companies are often left in the dark with regard to whether and/or when they should publicly disclose that they are under investigation.  The Southern District of New York recently provided much-needed guidance on the issue. On… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims, Securities and Commodities

SEC Describes Recent Efforts to Combat Pyramid Schemes and Affinity Frauds

Over the past two years, the Securities and Exchange Commission (SEC) has stepped up enforcement actions against pyramid schemes and related affinity frauds. Last week, in a speech at the University of Illinois at Chicago, Andrew Ceresney, director of the SEC’s Enforcement Division, addressed his division’s most recent efforts to combat these frauds. In particular,… Continue Reading
Anti-Bribery and Corruption, Compliance, Enforcement and Prosecution Policy and Trends, Securities and Commodities

Key Takeaways From This Year’s Early FCPA Enforcement Actions

February has been a big month for U.S. Foreign Corrupt Practices Act (FCPA) enforcement. It started with the U.S. Securities and Exchange Commission (SEC) quietly resolving a string of relatively small matters.  Then, at the end of last week, the SEC and U.S. Department of Justice (DOJ) entered into a global resolution with VimpelCom in… Continue Reading
Securities and Commodities

Variable Annuities Are Retirement Investment Product of Interest in SEC’s 2016 Examination Priorities

As we discussed yesterday, the Securities and Exchange Commission’s (SEC’s) Office of Compliance Inspections and Examinations (OCIE) released its examination priorities for 2016 on January 11 (the “Examination Priorities”). Retirement investments continue to be an area of focus for OCIE as we march into the new year. Digging deeper into this area, OCIE identified variable… Continue Reading
Compliance, Financial Institution Regulation, Securities and Commodities

SEC Provides Guidance on 2016 Examination Areas of Focus

On Monday, January 11, 2016, the Securities and Exchange Commission (SEC) announced its Office of Compliance Inspections and Examinations’ (OCIE) areas of focus for 2016, which include: protecting retail investors and investors for retirement; assessing issues related to market-wide risks; and use of its ability to analyze data to identify and examine registrants that may… Continue Reading
Securities and Commodities

Just Admit It – SEC Requiring Admissions with Increased Frequency

As we previously reported, in 2012 and 2013 the Securities and Exchange Commission (SEC) changed its longstanding policy of permitting defendants to settle enforcement actions without admitting or denying liability. Initially, the policy was changed only with regard to settlements involving parallel criminal actions. Subsequently, the policy was further revised to require admissions in certain… Continue Reading
Securities and Commodities

SEC Proposes to Amend Rules Governing Administrative Proceedings

On September 24, 2015, the Securities and Exchange Commission (SEC) issued a press release announcing proposed amendments to its Rules of Practice governing administrative proceedings. The announcement comes at a critical time, when the SEC’s use of administrative proceedings has come under increasing fire. The proposed rules attempt to address aspects of the administrative process… Continue Reading

We use cookies to enhance your experience of our website. By continuing to use this website, you agree to the use of these cookies. For more information and to learn how you can change your cookie settings, please see our policy.

Agree