These are some of the compliance-related stories that recently caught my attention.
Conflicts of interest for “the little people”
by Jeff Kaplan
Conflicts of Interest Blog
The conclusion of the Mueller investigation does little to resolve the much broader set of concerns regarding President Trump’s conflicts of interest. These are too numerous to be chronicled on this site, but are being tracked on a weekly basis by the Sunlight Foundation, which even offers a searchable data base of Trump COIs. Additionally, a study recently conducted by USA Today showed that by failing to divest his various investments before taking office, Trump has created more than 1400 COIs.
http://conflictofinterestblog.com/2019/03/conflicts-of-interest-for-the-little-people.html
$50M SEC Whistleblower Award
by Matt Kelly
Radical Compliance
In other words, if you want that SEC payday — you have bring high-quality information, and bring it quickly. That’s what Claimant 2 did, Claimant 4 did not, and Claimant 1 kinda sorta did but not quite quickly enough. Rest assured, the whistleblower bar will be making that point to your employees in prompt fashion, too. Compliance officers should respond accordingly.
http://www.radicalcompliance.com/2019/03/26/50m-sec-whistleblower-award/
Deciphering Americans’ Views on Cryptocurrencies
by Sean Hundtofte, Michael Lee, Antoine Martin, and Reed Orchinik
Liberty Street Economics
Individuals who owned cryptocurrency or were interested in buying it were particularly likely to perceive cryptocurrency as being similar to gold (41 percent) and stocks or bonds (39 percent). This suggests that such individuals may think of cryptocurrencies as an investment vehicle. In addition, 37 percent of respondents within this group likened cryptocurrency to traditional money. If we think of traditional money as a means of payment, then this distribution of views is consistent with the idea that cryptocurrencies are currently perceived less as a payments mechanism than as an investment, even if they can play both roles.
https://libertystreeteconomics.newyorkfed.org/2019/03/deciphering-americans-views-on-cryptocurrencies.html
Assessing Why Compliance Programs Fail
by Veronica Root Martinez
The CLS Blue Sky Blog
In an article recently published in the Indiana Law Journal, I argue that institutions can improve their assessments of compliance failures—and thereby their future compliance efforts—by changing the way they think about such programs in the first place. I explain that the compliance process consists of four, distinct stages: prevention, detection, investigation, and remediation. I argue that more root-cause analyses will occur if firms ask at what stage or stages within the compliance program a failure or failures occurred. By conducting this sort of analysis when compliance failures occur, firms may be better equipped to address and prevent similar, future misconduct.
http://clsbluesky.law.columbia.edu/2019/03/26/assessing-why-compliance-programs-fail/
The Compliance Process: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3151893
SEC Employees to Get More Co-Workers, But Smaller Raises
by Benjamin Bain
Bloomberg
The Wall Street regulator will add 100 people this year after lifting a hiring freeze, Clayton said in an email to staff this week. In the same message, he said current employees would be getting pay increases averaging 2.4 percent, acknowledging that the boost might disappoint some workers because it’s less of a jump than they’ve gotten in recent years.
https://www.bloomberg.com/news/articles/2019-03-21/sec-pay-raise-plan-gets-cold-shoulder-from-agency-union-leaders
Insider Trading and Executive Overreach
By Kevin R. Douglas
The CLS Blue Sky Blog
The recent controversy over President Donald Trump’s use of his emergency authority to fund a wall on the U.S. southern border has awakened many Americans to the problem of executive overreach. Yet, what few may appreciate is that executive overreach can cause trouble in contexts far beyond immigration or border security. For example, consider U.S. securities regulation. Executive overreach was a major factor in creating confusion in the current U.S. laws against insider trading, and some reformers propose using new executive actions to correct the problem.
http://clsbluesky.law.columbia.edu/2019/03/22/insider-trading-and-executive-overreach/
Lorenzo: A Win for the SEC and All Plaintiffs
by T. Gorman
SECActions
Finally, the Court’s determination may also be a victory for the class action bar. While private litigants cannot bring fraud claims based on an aiding and abetting theory, they can now pursue even “bit” players in a securities fraud by wedging the conduct into the expansive contours of the statutes. Lorenzo is the ode to expanding securities fraud liability.
http://www.secactions.com/lorenzo-a-win-for-the-sec-and-all-plaintiffs/
Supreme Court: Even One Who Did Not “Make” a False Statement May Still be Subject to Scheme Liability
By Kevin LaCroix
The D&O Diary
The relationship the court drew between “making” and “dissemination” a false statement is interesting, particularly in the current age when so much information is shared electronically, often as an attachment or a link. The court’s conclusion that someone can be liable for disseminating a false statement even without having “made” it could potentially have some interesting implications in the current electronic age when so much information is “forwarded” in electronic communications.
https://www.dandodiary.com/2019/03/articles/securities-laws/supreme-court-even-one-who-did-not-make-a-false-statement-may-still-be-subject-to-scheme-liability/
