Last year, the Securities and Exchange Commission raised a cloud of concern when it started its cybersecurity initiative aimed at broker/dealers, investment advisers and fund managers. Based on an interview in April it seems that initiative would continue into a phase 2. The SEC recently released its OCIE’s 2015 Cybersecurity Examination Initiative. According to the … Read more »
Outside Trading Defendants Settle
A month ago, the Securities and Exchange Commission brought charges against a large network of traders who made a big pile of money by hacking into corporate press release websites and trading on the news before it was made public. Two traders, who made $25 million in the scheme, settled the charges against them and … Read more »
Compliance Bricks and Mortar for September 11
These are some of the compliance-related stories that recently caught my attention. What Does Aristotle Have to do With Business Ethics? by Ben Dipietro in the WSJ’s Risk & Compliance Journal History can show us the consequences of unethical behavior, the disasters that have resulted from unethical behavior. But it’s not just a mirror reflecting … Read more »
Compliance, Workplace Investigations, and Deflategate
The National Football League kicks off its season tonight with star quarterback Tom Brady starting under center for the defending Super Bowl Champions, the New England Patriots. It was tumultuous off-season because of a botched workplace investigation and bungled discipline. There are lessons to be learned for compliance professionals. First. I’m a long time New … Read more »
The SEC Goes After the Gatekeepers
When a fraud is uncovered, the Securities and Exchange Commission not only wants to get the fraudsters, it also wants to get those who should have stopped the fraud: the gatekeepers. The SEC recently brought a case against an investment advisory firm and its CEO for fraudulently inflating the values of investments in the portfolio … Read more »
Vacation Reset For Your Compliance Program
Many of you, like me, are back from vacation or a Labor Day barbecue. I’m still washing sand out of my shoes and rubbing aloe on my skin that was in the sun too long. After being away from the office, my email box is filled with messages that should be returned, issues that need … Read more »
Proposed Anti-Money Laundering Regulations for Investment Advisers and Fund Managers
After years of talking about it, the Financial Crimes Enforcement Network (FinCEN) issued a proposed a rule requiring certain investment advisers to establish anti-money laundering programs and report suspicious activity to FinCEN. The new regulations propose to include investment advisers in the general definition of “financial institution,” which would require them to file Currency Transaction … Read more »
Management Fee “Waiver” Tax Treatment
The Treasury and the Internal Revenue Service issued proposed regulations relating to disguised payments for services rendered by a partner to a partnership. Private fund managers have used management fee “waiver” mechanisms by reducing the management fee payable to the fund’s manager and the receipt of a corresponding profits interest by the general partner. The … Read more »
Compliance Bricks and Mortar for August 21
These are some of the compliance-related stories that recently caught my attention. The 5 Most Common AML Compliance Program Deficiencies by Michael Volkov in Corruption, Crime & Compliance In my view, AML programs do not get sufficient support and exposure from top-level management. A compliance failure usually can be traced back to the lack of … Read more »
Hiring Relatives Could Be An Illegal Bribe
In the case of BNY Mellon, it was an illegal bribe in violation of the Foreign Corrupt Practices Act. The Securities and Exchange Commission charged BNY Mellon that it violated the Foreign Corrupt Practices Act by providing internships to family members of foreign government officials affiliated with a Middle Eastern sovereign wealth fund. The unnamed … Read more »