News & Events – Bates Research

With 2023 wrapping up soon, Bates takes a look at what is and is not trending in matters resolved through FINRA arbitration through the first nine months of 2023.

Financial institutions play a vital role in detecting and reporting suspicious activity that may be related to financial crimes. The Financial Crimes Enforcement Network (FinCEN) issued recent alert to highlight a prominent virtual currency investment scam known as “pig butchering.” The alert points to several red flags that financial institutions should look out for to detect suspicious activity related to this scam.

Elder abuse is a devastating problem that affects millions of seniors every year. In its 2022 Elder Fraud Report, the FBI’s Internet Crime Complaint Center reported total losses of $3.1 billion reported by victims over 60 years old—an 84 percent increase in losses from 2021. This alarming statistic reveals just how important it is to be aware of elder abuse and take steps to prevent it.

AI and algorithms have wide usage but bring unique risks to organizations, including compliance risks due to potential bias, discrimination, and data breaches. The FTC issued guidance in April 2023 to help manage these risks and protect consumers.

In a recent Staff Bulletin, SEC staff clarified care obligations for broker-dealers and investment advisers towards retail clients. Both the Reg BI and fiduciary standards share the same principles and responsibilities towards retail investors, narrowing the differences between the two.

The Money Transmission Modernization Act (MTMA) was created to modernize the money transmission industry by allowing for comprehensive standards and requirements that reduce regulatory burden and encourage innovation, and improved consumer protections that allow for less confusing rules across states. In this article, we look at the three key benefits of the MTMA, as well as the current attitude of state legislatures toward its adoption.

FINRA and the SEC are increasingly focused on manipulative trading practices, such as wash sales and front running, due to an uptick in these violations and the regulators' use of advanced data analytics to detect potential market abuses.

OFAC has recently made updates to its website designed to make it easier for users to find guidance on specific industries, use the reporting system, stay current on policy updates, and access OFAC's sanctions database quickly and efficiently.

Download this illustrative and detailed chartbook featuring U.S. economic and capital markets analysis for 2022. From Bates Group Director Greg Kyle and President Ben Pappas.

The Consumer Financial Protection Bureau (CFPB) engages in rigorous examinations of financial institutions to ensure that they follow all applicable laws and regulations, have effective compliance management systems in place, and provide meaningful consumer protections. Bates Group offers independent consumer compliance reviews to help protect your business and customers.

In response to the threat from cyber actors “who use constantly evolving and sophisticated tactics, techniques, and procedures to cause harmful cybersecurity incidents,” the SEC proposed a new set of comprehensive rules intended to mitigate that risk. The proposal is consistent with the White House’s recent announcement of a new comprehensive National Cybersecurity Strategy and the annual FBI report on cybercrime trends based on 2022 data. Bates has the details.

Fast-moving events in the financial markets are underscoring the need for a workable digital asset legislative and regulatory framework. Ongoing volatility continues to reduce overall crypto market value, and federal and state regulators have ramped up their enforcement efforts. Such volatility is the backdrop to this latest roundup on crypto developments.

In the aftermath of the collapse of three banking firms, Silvergate, Silicon Valley Bank and Signature Bank earlier in March, tensions in the banking sector continued over the past week with the shares of a number of regional banks including First Republic, PacWest Bancorp and Zions Bancorp under pressure. During the turmoil-filled week, several questions were raised about the strength of U.S. banks, whether regulators moved quickly enough, the role of VCs, and if the failures were foreseeable. Read the analysis from Bates Expert and Director Greg Kyle.

On Sunday, U.S. regulators seized Signature Bank, and on Friday, U.S. regulators seized the assets of Silicon Valley Bank (“SVB”). The seizure of SVB led to one of the largest bank failures in U.S. history and the largest failure of a financial institution since the 2008 financial crisis. The failure of SVB comes on the heels of Silvergate Capital announcing on Wednesday that it would voluntarily wind down operations and liquidate its bank. With three bank collapses in one week, the markets, investors, and many of our clients are understandably on edge.

Consumer protection laws are designed to protect consumers, to keep sellers honest and to protect purchases of goods from fraudulent or deceptive marketing. Consumer protection laws are enforced by the Federal Trade Commission, and businesses that fail to maintain compliance with federal consumer protection laws could face severe consequences.

In the coming months, the New Jersey legislature is expected to pass the Digital Asset and Blockchain Technology Act, a bill that would establish one of the broadest licensing and regulatory frameworks on digital assets in the country. The legislation is being closely watched as it offers companies a more comprehensive alternative to the current standard for the regulation of digital assets prescribed under New York law. Bates has a short summary and comparison chart.