These are some of the compliance-related stories that recently caught my attention.
SEC Adds Fuel to the Best-Interest Fire by Aron Szapiro
Many of us probably have fiduciary rule whiplash. On March 15, a court struck down the Department of Labor’s rules package, known as the fiduciary rule, placing in limbo the new rules as we wait to see if the agency appeals. Last night, the Securities and Exchange Commission weighed in in a big way, dropping their version of a fiduciary standard late after a vote of 4 to 1. The SEC has the ball now, and it wants to run with it. [More…]
The SEC’s Scare Tactics May Work on Advisers by Ernest Badway
In rapid succession, the SEC has issued warnings and announced sanctions against registered investment advisers for fee and expense practices, false statements regarding assets under management, and misleading performance data. No one should be surprised that the SEC is actively seeking to uncover transgressions in the RIA field. [More…]
U.K. to Dig Into Who Owns London Property by Mara Lemos Stein
Foreign entities that own property in the U.K. will need to disclose the beneficial owners of the assets in a public register or face criminal charges under a proposed law. Parliament will draw up legislation for the proposed register, the first of its kind in the world, later this year. A fully accessible register of beneficial owners of U.K. real estate isn’t expected to go live until 2021, but current property owners need to start working to comply, attorneys said. [More…]
Starbucks and Policy Management Perils by Matt Kelly
The peril for large organizations is that they might lurch for simple policy solutions that create more problems than they solve. For example, Starbucks could enact a nationwide policy: all seats and bathrooms are reserved for patrons who have already purchased a product.
A policy like that would clearly put Nelson and Robinson in the wrong, regardless of race. It’s simple and effective, but it also undercuts the culture and spirit Starbucks wants to achieve: being the friendly, leisurely “third place” between home and work where people can relax over food and coffee. It would also, inevitably, lead to some other store denying the bathroom to some ill person, or a mother with small children, or lord knows what. [More…]
2018 Global Study on Occupational Fraud and Abuse by the Association of Certified Fraud Examiners
This study contains an analysis of 2,690 cases of occupational fraud that were investigated between January 2016 and October 2017. The data presented herein is based on information provided by the Certified Fraud Examiners who investigated those cases. Their firsthand experience with these frauds provides an invaluable resource for helping us understand occupational fraud and the impact it has on organizations. [More…]
Ninth Circuit: No Crime Policy Coverage for Social Engineering Fraud Losses by Kevin LaCroix in the D&O Diary
Aqua Star is a seafood importer. One of its employees was duped by a fraudster posing as one of the company’s seafood vendors into sending $713,890 to an overseas bank account controlled by the fraudster. The fraudster had directed the employee to change the vendor’s bank account information. The employee made the changes as instructed. The company sought coverage for the loss of funds under the computer crime coverage in its commercial crime policy. The crime insurer denied coverage for the loss arguing among other things that coverage was precluded by a policy exclusion (Exclusion G) precluding coverage for “loss or damages resulting directly or indirectly from the input of Electronic Data by a natural person having the authority to enter the Insured’s Computer System.”
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Arguments about gold vein refrain mainly remain in vain By Rodney F. Tonkovic, J.D. in Jim Hamilton’s World of Securities Regulation
A Second Circuit panel has affirmed that a gold mining company was not misleading investors when it repeatedly expressed confidence in a glowing estimate of how much gold a project could produce. In a ruling by summary order, the panel concluded that none of the three sets of statements at issue constituted a material misstatement or omission (Martin v. Quartermain, May 1, 2018, per curiam). [More…]
