Compliance Bricks and Mortar for January 12

These are some of the compliance-related stories that recently caught my attention.


Five Things to Think About Before a Surprise SEC Exam

by Joshua M. Newville, Robert E. Plaze, Christopher Wells and Alexandra V. Bargoot

If a team from the SEC arrives at your office and says, “We are conducting an on-site examination and would like to talk to the CCO right now,” are you prepared? A handful of registered investment advisers have faced surprise SEC exams in recent months. These exams come in two flavors: either a “for cause” exam arising from SEC staff concerns relating to a specific ongoing issue, or a standard exam that for some reason has a surprise component. [More…]


Are You Ready for Your Next Regulatory Exam?

by Patty P. Tehrani, Esq.

I know regulatory examinations can be stressful but without a defined process even more so. I’ve lived through exams managed without a process and those guided by one and not surprisingly having a process inevitably garnered better results. Below I share some practical tips to help you develop an examinations process or improve one that you already have. [More…]


Eight Compliance Events to Watch in 2018

by Matt Kelly

Without further delay, then, my annual list of compliance issues that should be worth watching in 2018. In no particular order…

SEC guidance on cybersecurity.  [More...]


“The Big Chill”: Personal Liability and the Targeting of Financial Sector Compliance Officers

by Court E. Golumbic

Prominent law enforcement and regulatory officials have referred to financial sector compliance officers, as “essential partners” in ensuring compliance with relevant laws and regulations, whose “difficult job[s]” merit “appreciat[ion] and respect.” Officials have noted the critical role these professionals play in shaping the culture of financial institutions, as well as the industry more generally. However, a series of recent enforcement actions in which financial sector compliance officers have been personally sanctioned has strained this partnership, fueling concerns among financial sector compliance officers that they are being unfairly targeted. [More…]


Court Rejects SEC Request For “Obey The Law” Injunction

in SEC Actions

[A] district court has granted summary judgment against the Commission in a Securities Act Section 5 case centered on a years long Ponzi scheme based on the statute of limitations and refused to enter an injunction, although Kokesh is not actually citedSEC v. Jones, Civil Action No. 17-11226 (D. Mass. Opinion Jan. 5, 2018).[More…]


Discretionary Management of IRAs: Prohibited Transaction Issues for RIAs

However, there is a caveat. That is, BICE only applies to non-discretionary investment advice. In other words, if the financial institution or its advisors have the responsibility or authority to make the decisions, or if they actually make the investment or transaction decisions, and there is a financial conflict of interest (that is, a prohibited transaction), BICE does not provide relief. To make matters even worse, there are very few exemptions for prohibited transactions resulting from discretionary decisions. Based on conversations with RIAs over the last few months, I have learned that many of them are not aware that, where they have financial conflicts (for example, 12b-1 fees or payments from custodians) for discretionary investment management for IRAs, there is usually not an exemption and the compensation is prohibited. [More…]


Some bitcoin foolishness:

Miami Bitcoin Conference Stops Accepting Bitcoin Due to Fees and Congestion
Next week the popular cryptocurrency event, The North American Bitcoin Conference (TNABC) will be hosted in downtown Miami at the James L Knight Center, January 18-19. However, bitcoin proponents got some unfortunate news this week as the event organizers have announced they have stopped accepting bitcoin payments for conference tickets due to network fees and congestion. [More..]

Long Island Iced Tea shares soar after changing name to Long Blockchain
A visit to the new website shows that Long Blockchain is in the “preliminary stages of evaluating specific opportunities” in the blockchain space. At this time, the company has no agreements with any blockchain entities, nor does it have assurance that an agreement will be forthcoming, the website said. [More…]

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