News & Events

Join Robert Lavigne, Managing Director, Bates Compliance Solutions as he walks us through a 20-minute webinar focusing on the 2018 SEC-OCIE Exam Priorities and what compliance professionals should be focusing on now.

Away from the headlines, federal and state regulators continue to prepare financial institutions for their new anti-money laundering compliance obligations. In the past few weeks, the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) and FINRA provided additional guidance to covered institutions on how to comply with rules that are set to go into effect next month. In New York, the certification provisions of the Department of Financial Services (“NYDFS”) BSA/AML rules went into effect. Bates research has the highlights.

The SEC Division of Enforcement announced a "Share Class Selection Disclosure Initiative" intended to protect and reimburse investors from an adviser’s conflict of interest. The new initiative offers an incentive to advisers and related individuals and entities to review and potentially self-report conflicts of interest, as they relate to the adviser’s collection of 12b-1 fees, as well as its disclosure of such fees, that are in violation of fiduciary duties imposed under the Investment Advisers Act. The deadline to conduct this analysis, address these issues, and self-report is Tuesday, June 12th – only seven weeks away.

At an open meeting, the Securities Exchange Commission voted 4-1 to propose a set of rulemakings and interpretations designed to establish clear relationship standards between broker dealers and investment advisers and their retail clients. The SEC prescription comes on the heels of the 5th Circuit Court of Appeals decision to vacate the Labor Department’s stricter “fiduciary duty rule” promulgated under the Obama administration.

Bates Group is pleased to introduce our new experts and consultants: Michael Conn, Will Freebing, Mike Putetti and Art Sims.

Comments must be submitted by April 27, 2018 on a FINRA proposal to consolidate rules on outside business activities of registered persons (Rules 3270 & 3280). The proposal contains a number of amendments intended “to reduce unnecessary burdens while strengthening investor protections.”

Congress has become increasingly sensitive to high-profile data breaches. Two new Congressional bills have been proposed to establish general standards for data protection and also address a number of concerns regarding the security of consumers’ credit reports, inspired by the Equifax breach. New York Attorney General Eric Schneiderman said his office is in the midst of investigations into Equifax and has joined the Massachusetts Attorney General in an investigation into Cambridge Analytica. 

Meanwhile, Congressional leaders have called for “a national solution to create data security safeguards and responsible notification processes,” although some State Attorneys General made clear that this may be an incomplete solution.

This is the second in a two-part series looking at the current state of cyber protections in light of recent hacks, data breaches, and cyberwarfare.

Attacks on private personal and financial information have not decreased since Bates Research last reported on the headline-grabbing data breaches of Uber and Equifax, and the governmental data breach of the SEC’s EDGAR filing system. In the wake of three new dramatic data breaches, cyberthreats seem far from contained. 

This is the first in a two-part series looking at the current state of cyber protections in light of recent hacks, data breaches, and cyberwarfare.

The SEC Division of Enforcement announced a "Share Class Select Disclosure Initiative" intended to protect and reimburse investors from an adviser’s conflict of interest. The new initiative offers an incentive to advisers and related individuals and entities to review and potentially self-report conflicts of interest, as they relate to the adviser’s collection of 12b-1 fees, as well as its disclosure of such fees, that are in violation of fiduciary duties imposed under the Investment Advisers Act. If the adviser self-reports the conflict and returns the money to investors, the Division of Enforcement will recommend that the Commission accept favorable settlement terms and not impose civil penalties that would otherwise have been imposed. Investment advisers that do not self-report and reimburse may face stronger sanctions. Bates Group recommends that advisers review their share class selection policies and procedures and disclosure practices. Follow the link for a more detailed review of the issues at stake and how Bates Group can help.

FINRA is stepping up its efforts to address a number of longstanding procedural issues in its arbitration forum. With proposals to (i) increase the likelihood of recovery on unpaid arbitration awards, (ii) tighten the process to expunge customer dispute information, (iii) eliminate fees for explaining certain arbitration decisions and (iv) change procedures for arbitrating small claims, regulators are attempting to both protect investors and strengthen the securities arbitration forum. Bates Research has a top-line brief on the headlines.

In a little more than ten weeks, new rules go into effect that require municipal securities dealers to disclose the mark-ups and mark-downs they charge when selling municipal bonds to retail investors. Despite a significant notice and comment period, the provision of a year and a half of lead time, and considerable substantive guidance, bond traders are said to be scrambling to meet the May 14th implementation date. They may yet get some relief. We take a closer look at where things stand.

Tech firms are scrambling to gain a piece of the 8.5 trillion-dollar financial industry market, and financial institutions are racing to partner with tech firms to create competitive advantage. Regulators and legislators, mindful of protecting investors and ensuring the integrity of the financial markets, are simultaneously promoting fintech business innovation, issuing enforcement warnings, entering into regulatory collaborations, and looking to regtech to help them adjust to the shifting paradigm. Highlights of federal and state activity over the past few weeks demonstrate this dynamic and their concerns. Bates Research dives into the details.

In the sixth annual publication of examination priorities, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) identified four “pillars” of their mission to protect investors and ensure the integrity of the U.S. capital markets. The 2018 OCIE priorities are consistent with these pillars and do not reflect a significant new direction for OCIE. Beyond the specific highlights, however, there is a clear concern about limited regulatory resources and a corresponding enthusiasm for the use of data, technology and analytics. Bates Research has the details.

The SEC has announced their examination priorities for 2018.

With a week to go before broad FINRA rules intended to protect seniors from financial exploitation take effect, activity across the federal and state landscape shows no sign of slowing. In addition to looking at the updated FAQs released by FINRA in relation to the new rules, we also review reaction to the passage of the Elder Abuse Prevention and Prosecution Act, consider this week’s House passage of the Senior $AFE Act, and highlight some important state-level developments.

Bates Group is pleased to introduce our new experts and consultants: David Gibbons, Allen Margolius, Robert Morris, Daniel Perkins, Ricardo Ramos and Lloyd Wennlund.