Cybersecurity Wrap Up – Take Two

The  Securities and Exchange Commission’s Office of Compliance Inspections and Examinations issued a new Risk Alert this week on cybersecurity. The risk alert summaries observations from their phase 2 cybersecurity examinations conducted in 2015 and 2016. In phase 2, OCIE examined 75 firms, including broker-dealers, investment advisers, and registered funds.

The examinations focused on written policies and procedures regarding cybersecurity and testing the implementation of those procedures. The exams also sought to better understand how firms managed their cybersecurity preparedness by
focusing on

  1. governance and risk assessment;
  2. access rights and controls;
  3. data loss prevention;
  4. vendor management;
  5.  training; and
  6. incident response.

What are firms doing right?

  • Conducting periodic risk assessments of critical systems to identify cybersecurity threats, vulnerabilities, and the potential business consequences of a cyber incident.
  • Conducting penetration tests and vulnerability scans on systems that the firms considered to be critical
  • Using some form of system, utility, or tool to prevent, detect, and monitor data loss as it relates to personally identifiable information.
  • Ensuring regular system maintenance, including the installation of software patches to address security
    vulnerabilities.
  • Having business continuity plans and response plans.
  • Identifying cybersecurity roles and responsibilities for the firms’ workforce.
  • Verifying customer identification before transferring funds
  • Conducting vendor risk assessments

What are firms doing wrong?

  • Policies and procedures were not reasonably tailored to the organization.
  • Not conducting annual reviews
  • Not reviewing security protocols at least annually
  • Inconsistent instructions on remote access
  • Not making sure that all employees received cybersecurity training
  • Not fixing problems found in penetration tests

The risk alert finishes with the elements the OCIE sees as indicative of a firm implementing robust cybersecurity controls. I think most CCOs should grab a copy of the risk alert and sit down with their policies and CTOs to see how they stack up against those elements.

Sources:

Compliance Bricks and Mortar – Pan Mass Challenge Edition

When this story publishes on Friday morning, I’ll be on my bike riding from Boston to Sturbridge for Day Zero of the Pan Mass Challenge. (I’m adding an extra day of cycling before the First and Second Day of the PMC.) Thanks to so many of you who read Compliance Building for your generous donations and kind words. I have my donor list and those kind words printed and tucked into the back pocket of my jersey. I’ll keep them with me over the 250+miles of cycling I have to complete this weekend.

If you have not contributed, there is still plenty of time to make a donation to fight cancer. I love seeing donation messages pop up while I’m riding. Donate here: http://pmc.org/egifts/DC0176

As for compliance-related matters, here are some of the stories that recently caught my attention.

SEC Whistleblower Award Sends Message to Government Employees by Samuel Rubenfeld in the Wall Street Journal

A $2.5 million award announced by the SEC last week didn’t include the name of the agency where the person worked, the company involved in the misconduct or the nature of the conduct involved, but lawyers representing tipsters and companies in whistleblower cases drew lessons from a footnote attached to the order. The footnote delineated who, among government employees, is eligible: Anyone who works for a local, state or federal agency, other than those at regulatory agencies or a law-enforcement organization. [More…]

Main Street and Premium Listings by Matt Levine

I think we are up to the Seventh Law of Insider Trading. The first six are: (1) don’t do it, (2) don’t do it by buying short-dated out-of-the-money call options on undisclosed merger targets, (3) don’t text or email about it, (4) don’t do it in your mother’s account, (5) don’t do it by planting bombs at a company and shorting its stock, and (6) don’t do it while employed at the Securities and Exchange Commission. I hereby declare the Seventh Law: (7) If you are going to insider trade, don’t Google “how to insider trade without getting caught” before or after you trade. [More…]

Mentoring Compliance Professionals by Roy Snell in the SCCE Blog

Call someone you know who could use a little mentoring. Call today. Call again in a week or two. Don’t wait for someone to match you up. It doesn’t work that way. Pick someone you would enjoy working with. Pick someone who is a “personality match.” Pick someone you think has potential. Pick someone you would be proud to say you helped. Ask them how they are doing. Think about what they need help with and send them an article or a link to a website. Tell them where you received your best compliance and ethics training. Encourage them to be involved in and hang out with the profession. Go onto social media and answer a few questions or make a comment about something you recently discovered. Write an article or blog post. Speak at a conference.  Or better yet, invite your mentee to co-present or co-author a post or article. We don’t need much of your time. We just need a little bit of time from a lot of people. [More…]

More about Crime Coverage and Social Engineering Fraud by Kevin LaCroix in The D&O Diary

Just days after a Southern District of New York judge ruled in the Medidata Solutions decision that the Computer Fraud section of a commercial crime policy covered losses from social engineering fraud  (as I discussed in a post last week), a judge in the Eastern District of Michigan has held that a crime policy’s computer fraud section did not apply to social engineering fraud.  [More…

The Ethics of Opposition Research by Hana Callaghan in the Markkula Center for Applied Ethics blog

Opposition research per se isn’t unethical, but there are boundaries. Starting with the premise that the goal of our political process is to create an informed electorate that can make educated choices come election day, we can assess whether those boundaries have been crossed. An ethically informed electorate requires that all information researched and used by a political campaign be true, fair, and relevant.  [More…]

Was there a Housing Price Bubble? Revisited by Alex Tabarrok in Marginal Revolution

Let’s go back to the Shiller graph, now updated to 2017. Over the entire 20th century real home prices averaged an index value of about 110 (and were quite close to this value over the the entire 1950-1997 period). Over the entire 20th century, housing prices never once roce above 131, the 1989 peak. But beginning around 2000 house prices seemed to reach for an entirely new equilibrium. In fact, even given the financial crisis, prices since 2000 fell below the 20th century peak for only a few months in late 2011. Real prices today are now back to 2004 levels and rising. As I predicted in 2008, prices never returned to their long-run 20th century levels. [More…]

 

Stick The Landing

I saw this picture and it made think about compliance. At its most basic, the plane did land, the aviators did not die, and the aircraft carrier is still floating.

But it was a not a compliant landing.

The plane, the aircraft carrier, and the pilot are all damaged to some extent. That it was not fatal to any of them does mean it was good. Although, better than the alternative.

Compliance is not a success if merely sticks the landing. It needs to monitor the entire flight plan, to make sure things are on track for a good landing. You need reporting along the way and a judgment on the final result. Merely noting that something landed misses the point.

I don’t know what lead to this landing. Obviously, something went wrong. So perhaps this landing was a good result given the circumstances. Being able to walk away from a situation could be considered a success if things were really bad.

In the business world that more likely means that you ended up talking the lawyers instead of the compliance group. The lawyers figure out how to get you out of trouble. Compliance tries to keep you from getting into trouble. Both want you to stick the landing.

Sources:

I’m raising money for the Dana-Farber Cancer Institute by participating in the Pan-Mass Challenge. 100% of your donation is passed through to DFCI. I’m riding my bike for three days and 250+ miles. I appreciate the generous support I have received from so many of the readers of Compliance Building. You can donate through any of the links below.

Thank you,
Doug

Initial Coin Offerings and the Securities Laws

Regulators have been trying to figure out what to do with the new currencies coming to the marketplace. Bitcoin was the vanguard, bringing its blockchain technology into the public’s view. The Securities and Exchange Commission has issued a Report of Investigation that provides some insight into when these currencies and their rollouts are going to violate securities law.

I find Bitcoin’s distributed ledger technology called the blockchain to be intriguing. Bitcoin as a currency has its problems. The wild swings in its conversion rate make it look more like a commodity than the steady values expected of a currency. In the US we have distinct regulatory structures between commodities and securities.

(Speaking of currency, if you have some extra currency then use it to fight cancer. Support my Pan-Mass Challenge Ride.)

The SEC took a close look at the initial coin offering of DAO Tokens to see if it violated securities laws. The first test was whether the DAO Tokens were securities. The short answer is yes.

The hurdle with rolling out new virtual currencies is getting enough into circulation at launch to make them useful of enough to act like a currency. Bitcoin has been out long enough and is widely used enough that it has passed this hurdle. But the first person with a Bitcoin couldn’t do much with it.

I think it’s important to note that the DAO Tokens that are the subject of the report are not the virtual currency. The DAO Tokess were used to fund the enterprise that was intended to fund projects involving the Ether currency and the Etherium blockchain.

The DAO was essential a venture capital organization and the DAO tokens were the capital commitments. Fund managers will tell you right off the bat that the partnership interests in a venture capital fund are securities.

In looking at the DAO tokens, the SEC went right to the Howey test.

Participants invested money. Of course, cash is not the only way to invest. For the DAO tokens, the investors used Ether which has value and easily meets this prong of the test.

Participants had a reasonable expectation of profits. The DAO organization was set up as a venture capital endeavor and explicitly stated that DAO token holders would share in profits from any of the projects that generated revenue.

The difficult part of the prong was the “managerial efforts of others.” DAO token holders had voting rights but the promoter, Slock.it, was key to moving the enterprise forward according to the SEC. DAO would have “Curators” instead of managers who would chose the projects for voting by the DAO token holders.

Slock.it chose the initial batch of Curators.  Token Holders could vote to replace a Curator. But the decision to send the proposal to a vote is subject to approval of the Curators.  Curators had the responsibility and power to “(1) vet Contractors; (2) determine whether and when to submit proposals for votes; (3) determine the order and frequency of proposals that were submitted for a vote; and (4) determine whether to halve the default quorum necessary for a successful vote on certain proposals. Thus, the Curators exercised significant control over the order and frequency of proposals, and could impose their own subjective criteria for whether the proposal should be whitelisted for a vote by DAO Token holders.”

The SEC went on further to conclude that the DAO Token voting rights are closer to those of corporate shareholder, than an active participant in the management.

If the DAO Tokens are securities then the whole securities law regulatory regime applies unless there is an exemption for the offering of the DAO Tokens. The sponsors took no steps to limit the offering in a manner consistent with a offering exemption.

In the end, it was not the initial coin offering that was a problem, it was the offering of interests in the organization behind the coins that was a problem.

Sources:

The Pan Mass Challenge has many choices for those looking to participate and raise money to fight cancer. I have a friend who is a virtual rider. Due to injuries she is not ready to spend hours on a bike. I’m not a virtual rider. Not only am I riding the two days of the Pan Mass Challenge, I’m adding an extra Day Zero and riding 75+ miles just to get to the start of the Pan Mass Challenge.

Help me fight cancer by donating your real currency through one of the links below.

Thank you,
Doug

The One With The Fake Cancer Detection

The product sounds great: “The Gold Standard to monitor metastic breast cancer. Our Serum-2 test provides a more accurate representation of HER-2 status, facilitating more appropriate treatment strategies.” NanoMolecularDX is “executing a commercialization strategy” for this test and others.  In July is closed on $1 million of seed funding.

I’m an advocate for cancer research and raising money to fight cancer, so this sounds like a good thing. It also has an affiliated entity, MetaboRX that is a “preclinical stage biopharmaceuticals enterprise based on pioneering research in fatty acid metabolism.”

So why did NanoMolecularDX list as its general character of business “serving food; restaurant” on its filing with the Massachusetts Secretary of the Commonwealth? And why did MetaboRX list as its general character of business “serving food; restaurant” on its filing with the Massachusetts Secretary of the Commonwealth

The Securities and Exchange Commission also wants to know. The SEC filed a complaint against NanoMolecularDX  and its manager, Patrick Muraca.

“According to the SEC’s complaint, Patrick Muraca established two pharmaceutical development companies and raised nearly $1.2 million by representing to investors that their money would be used to develop products to detect cancer and other diseases. The SEC has traced the flow of investor funds into Muraca’s personal bank account and alleges that at least $400,000 has been used to pay rent for the restaurants and fund other purchases by Muraca, including payments to a casino, automotive shop, and cigar shop.”

According the SEC complaint Mr. Muraca used the money he raised for personal expenses: mortgage, groceries, and gas. He also used $45,000 of the investors’ money to pay the rent and expenses for his fiancee’s restaurant business. Once that went out of business he spent another $30,000+ to start a new restaurant.

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York announced criminal charges against Muraca.

“As alleged in our complaint, we’re intervening to protect investors because Muraca has veered from his stated intentions and has been using their money for purposes other than the fight against cancer and other diseases.” – Paul Levenson, Director of the SEC’s Boston Regional Office

Great job by the SEC’s Boston Office to identify the fraud and shut it down before Muraca was able to scam any more investors.

What compliance lessons can we learn from the case?

Corporate filings do matter. Any investor could have pulled up the filing Massachusetts filing and noticed that strange purpose. I generally don’t find the filings with the secretary of state to be incredibly useful. But sometimes you do find a red flag like this to stop you in your tracks.

Sources:

As I mentioned above, I’m raising money for the Dan-Farber Cancer Institute for the Pan-Mass Challenge. 100% of your donation is passed through to DFCI. I’m riding my bike for three days and 250+ miles. I appreciate the generous support I have received from so many of the readers of Compliance Building. You can donate through any of the links below.

Thank you,
Doug

 

Compliance Bricks and Mortar – John McCain Edition

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

Standardizing IRR Calculations and Related Disclosures – The SEC Continues to Focus on Private Equity Practice by Vivek Pingili, Esq.

In recent years the SEC has closely examined private equity fund performance and reporting during routine exams. The importance of this topic came to the forefront in December 2016 when the SEC subpoenaed Apollo Global Management, LLC (“Apollo”) for additional information on Apollo’s IRR calculation methodologies.[1] This SEC enquiry has caused a number of private equity firms to review their IRR calculations and disclosures. [More…]

SEC’s Reg Flex Agenda: Where Did Those Dodd-Frank Rules Go? by Broc Romanek in The CorporateCounsel.net

Normally – as I have blogged many times (here’s one) – the SEC’s Reg Flex Agendas tend to be “aspirational.” But perhaps this time is different.

As part of a federal agency-wide reveal of the new Administration’s plans for rulemaking, the SEC posted the latest version of its Reg Flex Agenda last week. This agency coordination is the Administration’s “unified agency regulatory agenda.”

This Reg Flex Agenda is notable for what it omits – get a load of what’s not on the list: …. [More…]

Cheating the Algorithm: The New “Pump and Dump” Fraud by John C. Coffee, Jr. in the CLS Blue Sky Blog

Today, an analogous new technological development is inviting new forms of fraud. The new development is algorithmic trading (which by some estimates now accounts for 30 percent of stock trading[1]). Computers are programmed to trade in a micro-second once they detect certain triggering quantitative data. Obviously, this is how high frequency traders have come to dominate the market.

But can the computer be duped? The answer is: definitely and sometimes easily. A pending SEC litigation shows how the contemporary financial world in its hunt for quantitative “Big Data” exposes itself to fraudsters. In SEC. v. Lidingo Holdings, LLC,[2] a pending action in the Southern District of New York, the defendant described itself as a “social media consultant,” but the SEC characterized it instead as a “stock promotion firm” that received high fees for commissioning and posting articles (and even tweets) about its clients written by a variety of ghost writers whom the firm commissioned and paid.  [More…]

Are We in a Compliance Arms Race? by Azish Filabi in Compliance & Enforcement

Over the past few decades, while companies have invested in building and expanding their compliance programs, researchers, practitioners and employees in some companies attest to a lack of corresponding reduction in misbehavior.[1]   Some even believe that the compliance programs may be a cause of increasing misbehavior.  This begs the question: Are we in a compliance arms race?  Mind Gym, Inc., a behavioral science oriented training firm has coined this term to refer to the cycle of increasing investment in compliance programs, which increases the demand for competent professionals, and the cost of doing business, while the levels of misbehavior remain unchanged, thus spurring calls for additional internal compliance controls.[2] [More…]

On Pan-Mass Challenge weekend, August 4 – 6, I will saddle up to ride with 6,200 other cyclists to raise money for life-saving cancer research and treatment at Dana-Farber Cancer Institute. 100% of your donation will go to cancer research and treatment at Dana-Farber Cancer Institute through its Jimmy Fund. I have made a personal commitment to raise $8000.00. I hope, that as a reader of Compliance Building, you will support my fundraising effort. You can donate through any of the following links:

Thank you,
Doug

The One With a Private Fund End-Around

Bradway Financial provides traditional investment advice. More than 75% of its clients are individuals that are not classified as high net worth. It’s owner, Brian Kimball Case must have had big dreams and wanted to also invest in private equity and run a private fund. That would require some additional compliance costs that he wanted avoid. He schemed to make an end-around on the regulatory requirements.

According to the SEC order, which the parties agreed tom, Mr. Case formed a parallel adviser, Bradway Capital, to be the adviser to two private funds he formed.

Bradway Capital filed with the SEC as an exempt reporting adviser. It took this position because it was an adviser to private funds with assets under management of less than $150 million.

The SEC disagreed with this position and took the position that Bradway Financial and Bradway Capital should be treated together. The two advisers were under common control and operationally integrated. They shared the same employees, operated in the same office, and shared the same technology systems.

Investment Advisers Act Release No. 3222 at 125 (June 22, 2011) [76 FR 39645, 39680 (July 6, 2011)]. In adopting several exemptions form the registration provisions of the Advisers Act, the Commission noted that certain commenters supported, for purposes of determining an adviser’s eligibility for an exemption from registration, treating each advisory entity separately without regard to the activities of, or relationships with its affiliates. The Commission declined to adopt this view, referring to Section 208(d) of the Advisers Act, which prohibits any person from doing indirectly or through or by any other person any act or thing which would be unlawful for such person to do directly.

The SEC took the position that Bradway Capital was not acting solely as an adviser to private funds and was not exempt.

The reason Mr. Case took this approach was to avoid the expense of complying with the Custody Rule by having to pay for an annual audit or surprise examinations.

The registration problem was just the tip of the iceberg. Obviously, the private fund failed the custody rule. There were some egregious valuations issues. Bradway failed to confirm that investors in the funds were Qualified Clients in order to be eligible for incentive payments.

The final mistake was using fund assets to pay for legal costs associated with this enforcement action. The fund documents allowed payment for costs directly relating to the ongoing activities of the fund. The enforcement action was against the adviser, not the fund, so the fund should have paid the legal fees.

Sources:

On August 4 – 6, I will saddle up to ride with 6,200 other cyclists to raise money for life-saving cancer research and treatment at Dana-Farber Cancer Institute in the Pan-Mass Challenge. 100% of your donation will go to cancer research and treatment at Dana-Farber Cancer Institute through its Jimmy Fund. I have made a personal commitment to raise $8000.00. I hope that as a reader of Compliance Building you will support my fundraising effort. You can donate through any of the following links:

Thank you,
Doug

CCO Liability: What Risks Remain and What You Can Do to Minimize Them

IA Watch produced an informative webinar on CCO Liability. These are my notes.

  • Carl Ayers (Moderator)  Publisher, Regulatory Compliance Watch
  • Brian Moran, Executive director and CCO Sterling Capital Management
  • Joseph McGill, J.D., Chief Compliance Officer Lord, Abbett & Co.
  • Kelley Howes, Counsel Morrison Foerster
  • Heidi Vonderheide of Ulmer & Berne LLP

First up was Heidi. Her firm is working on two CCO liability cases: the Robare case and the Blue Ocean Case with Jim Winkelmann.

These cases are on hold waiting for the Supreme Court to rule on the constitutionality of ALJ system.

The Robare discuss is a disclosure case. There was no evidence that there was any harm to customers.

Will the new leadership of the SEC change the CCO liability equation? It’s probably unlikely. Any case we see has likely been in the works for awhile. So any trend will take a while to show itself.

Kelley tackled what the SEC expects of CCOs. The number one item is to focus on the fiduciary duty of an investment adviser. A CCO should show a clear understanding of the firm’s business and associated risks. The CCO needs to now the regulations and how it integrates into the firm’s operations and disclosures.

The CCO should be in a position to be effective by having some independence and respect in the organization.

The SEC recognizes that the CCO role is hard and only wants to go after CCOs involved in wrongdoing or are asleep at the switch.

That being said, some of the SEC’s CCO cases don’t seem to follow the statements of the SEC.

Joseph emphasized the need for a conflicts matrix that gets reflected in the polices and procedures. The number one thing to focus on is not fixing a deficiency noted in a prior exam.

Brian highlighted the issues that arise when the CCO has other responsibilities. (A jack of all trades; a master of none.) He pointed out that many of the CCO case involved CCOs who wore more than one hat.  Most of the cases involved compliance personnel who affirmatively participated in the misconduct, misled regulators or failed to carry their responsibilities.

What about D&O insurance? It would be usual for a CCO to not be covered. A CCO is an officer of the firm. There is likely a fraud exclusion. There may be a question of whether it covers all of the enforcement and litigation costs.

Froome, Teamwork and Success

Professional cycling is not a mainstream sport in the U.S., so I would guess that few reading this story share my love of the Tour de France. (With the notable exception of Tom Fox.) The race has several different competitions going at the same time, with a confusing mix of skinny guys, tarted up with sponsors like a NASCAR racer. I became a fan two decades ago and continue to be enthralled by drama and athletic heroism on display.

On Sunday, Chris Froome was once again adorned with the “Maillot Jaune” on the Champs-Élysées as the overall winner of the 2017 Tour de France. This is his fourth win and puts him in the cycling pantheon as one of the greatest.

In his previous victories in 2013 and 2015, Mr. Froome dominated his rivals and was clearly the strongest overall contender. Last year, he seemed beatable, but still won. In 2017, Mr. Froome squeezed out his winning margin of 54 seconds on Rigoberto Uran and 2:20 on Romain Bardet during the two time trials in Dusseldorf and Marseille. He lost time to his rivals on the three mountain finishes. For one day he lost the yellow jersey to Fabio Aru in the Pyrenees when he was clearly out ridden and outwitted by his rivals. Mr. Froome completed the rare feat of winning the Tour de France without winning any of the individual stages.

Mr. Froome won this year because of teamwork. Team Sky was clearly the best team in the Tour de France. Rarely did we see Mr. Froome without teammates to support him, while his rivals were isolated on the road. In fact, his teammate Mikel Landa was only 1 second away from being on the podium in third place.

The results are a stark reminder of the importance of teamwork. It’s not good enough to be the best individual compliance officer. You need a team to win. You need the support of the compliance team around you. (Assuming you are big enough to have a team.) You need the support of the entire organization, working together, to make sure everyone works within the rules.

A typical Tour de France day will have a small breakaway of riders charge away from the main group of riders. The breakaway will be allowed to have the small wins along the stage while the main group conserves energy for the final victory. The leading riders will task their supporting riders with charging forward near the end to pass the breakaway and position them for victory.

Compliance is about teamwork and not the individual victory.

Sources:

I’ll being doing my own bike ride in a dozen days, although it will be far less of a feat than the Tour de France. On August 4 – 6, I will saddle up to ride with 6,200 other cyclists to raise money for life-saving cancer research and treatment at Dana-Farber Cancer Institute. 100% of your donation will go to cancer research and treatment at Dana-Farber Cancer Institute through its Jimmy Fund. I have made a personal commitment to raise $8000.00. I hope that as a reader of Compliance Building you will support my fundraising effort. You can donate through any of the following links:

Thank you,
Doug

 

Compliance Bricks and Mortar for July 21

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

Developments in the Asset Management Industry by Itzhak Ben-David in the HLS Forum on Corporate Governance and Financial Regulation

The rising concentration in the asset management industry and the rise of ETFs not only change the way investors invest, but also affect the character of the securities market. Large asset managers induce non-fundamental volatility through large trades, and ETFs propagate liquidity shocks originated by investors. Furthermore, arbitrageurs, and specifically hedge funds, may not always absorb and correct these shocks and may even contribute to the noise in prices. [More…]

Treasury fines Exxon Mobil $2 million for violating Russia sanctions while Secretary of State Tillerson was CEO

OF AC considered the following to be aggravating factors: (1) ExxonMobil demonstrated reckless disregard for U.S. sanctions requirements when it failed to consider warning signs associated with dealing in the blocked services of an SDN; (2) ExxonMobil’s senior-most executives knew of Sechin’ s status as an SDN when they dealt in the blocked services of Sechin; (3) ExxonMobil caused significant harm to the Ukraine-related sanctions program objectives by engaging the services of an SDN designated on the basis that he is an official of the Government of the Russian Federation contributing to the crisis in Ukraine; and (4) ExxonMobil is a sophisticated and experienced oil and gas company that has global operations and routinely deals in goods, services, and technology subject to U.S economic sanctions and U.S. export controls. [More..]

The Case Of The Wholly Owned, But Not Totally Held, Subsidiary That May Or May Not Be 100% Owned by Keith Paul Bishop in California Corporate & Securities Law

When someone says that a subsidiary is “wholly owned”, I believe that the common understanding is that the parent company owns all of the issued and outstanding equity of the subsidiary. What if the statement is that the subsidiary is “totally” or “100%” owned? I suspect that most people would not intuit a different understanding. The Securities and Exchange Commission, however, assigns different meanings to each of these terms at least so far as financial statements are concerned. Here are the three definitions:… [More…]

LEI: more than a number

Corporates trading across many asset classes in Europe using derivatives should take note that from 3rd January 2018, any firm subject to MiFID II transaction reporting obligations will not be able to execute a trade for a client who is eligible for a Legal Entity Identifier (LEI) and does not have one. [More…]

Fed Nominee Randal Quarles in His Own Words by Ryan Tracy in the Wall Street Journal

“In some ways Dodd-Frank was not ambitious enough, and in other ways it was overly ambitious and I think there are lots of ways to refine Dodd-Frank and other forms of regulatory policy in ways that would be beneficial to the economy.” [More…]

On Pan-Mass Challenge weekend, August 4 – 6, I will saddle up to ride with 6,200 other cyclists to raise money for life-saving cancer research and treatment at Dana-Farber Cancer Institute. 100% of your donation will go to cancer research and treatment at Dana-Farber Cancer Institute through its Jimmy Fund. I have made a personal commitment to raise $8000.00. I hope, that as a reader of Compliance Building, you will support my fundraising effort. You can donate through any of the following links:

Thank you,
Doug