News & Events –

FINRA remained busy through the end of Summer with several important regulatory actions. New actions included issuing updated guidance on supervision of third-party vendors, requesting feedback on a report by the Office of Financial Innovation (“OFI”) concerning broker-dealer approaches to cloud computing, and raising additional alarms about a phishing campaign using fraudulent FINRA email domains.

New FINRA rules for protecting investors from brokers with a significant history of misconduct went into effect on September 1, 2021. The new rules, adopted on March 10, 2021, broaden authority to discipline associated persons, impose stricter supervision on firms, and mandate greater disclosure in various proceedings.

Bates Compliance Managing Director Hank Sanchez's new article, "ESG – What it is and How CCOs Can Get Ahead of the Issues at Their Firms" (first appearing in the August 2021 issue of NSCP's Currents publication), provides timely and important insight for CCOs and firms tasked with addressing ESG. Read the reprint here.

While you are celebrating the final days of summer, we’ve compiled our annual summer roundup of news that you may have missed, as well as a sneak peek of live and virtual events happening this Fall.

Bates Group is a proud sponsor of the  IBDC 2021 Risk Management Conference, September 12-15, 2021, at the Montage Palmetto Bluffs in Bluffton, SC. This conference is attended by Chief Executive Officers, Chief Compliance Officers, Risk Management Officers, and Due Diligence Officers of major national IBDs and RIAs. Bates Group Director Andrew Daniel is a featured speaker.

Bates Group is proud to honor and support veterans as a sponsor of the Raymond James Valor Network annual golf tournament event on Saturday, September 11th, 2021.

Bates Group recently hosted employment litigators and experts for a CLE program to discuss the effects that current and future employment issues have had on workforce reintegration, supervisory activity, mental health and substance abuse, disciplinary actions, and Form U5 language and terminations. Panelists included financial services industry leaders and Bates Group Experts who shared what they are seeing today and what employers and employees can expect going forward in the post-COVID work environment. Bates looks at the highlights and insights from the program.

On August 10, 2021, FINRA issued a targeted examination letter alerting firms that the regulator was conducting a review of all activities related to options accounts. In the new examination letter, FINRA requests information on account supervision, communications, and diligence from January 1, 2021, through August 10, 2021 (the date of the letter). Though the due date for the information has not yet been published, firms should begin working to formulate their responses immediately.

Legislators, administrators and regulators have publicly advocated for government intervention to protect consumers and investors from cryptocurrency price volatility and the fraud and money laundering that has proliferated across digital platforms. With the passage of the bipartisan infrastructure bill in the U.S. Senate, comprehensive regulation of the industry seems inevitable. Meanwhile, SEC Chair Gensler’s recent remarks on crypto assets demonstrate the regulator’s focus on addressing gaps and protecting investors.

On July 21, 2021, the SEC Division of Examination issued two new risk alerts on Wrap Fee Programs and Principal and Cross Trading. The alerts were based on the latest observations of compliance deficiencies drawn from extensive examinations. The Division stated that the new alerts should be considered alongside earlier priorities and observations from 2019. In this article, Bates reviews the Division’s recent findings and guidance.

The Securities and Exchange Commission announced in a statement yeterday that “21 investment advisers and 6 broker-dealers have agreed to settle charges that they failed to timely file and deliver their client or customer relationship summaries – known as Form CRS – to their retail investors."

The White House, Congress, federal and state law enforcement agencies and regulators are mobilizing to combat the threat of ransomware. In the wake of high-profile attacks on businesses of all sizes, the Biden administration has made the issue a priority. In this article we focus on the significant recent administrative, legislative and regulatory efforts to confront ransomware, including: strengthening the digital resilience of critical infrastructure, the launch of a new interagency website to support the private sector’s cyber defenses, a $10 million “Rewards for Justice” program to catch cybercriminals, bipartisan cyber legislation, and SEC and NYSDFS developments, to name few.

Join Bates Insurance Experts on Tuesday, August 3, 2021 for an informative CLE webinar discussing cyber insurance and vanishing premium litigation, among other hot topics.

Bates Compliance Managing Director Hank Sanchez was recently quoted in a ThinkAdvisor article concerning the current shift in IA fee tructures and business models.

With the recent publication of its of national priorities for anti-money laundering and countering the financing of terrorism ("AML/CFT"), the Financial Crimes Enforcement Network ("FinCEN") fulfilled one of the core mandates under the Anti-Money Laundering Act of 2020: the establishment and dissemination of national AML priorities. The 12-page document is the product of consultations among the U.S. Treasury Secretary and Attorney General, federal regulators, state financial regulators, and national security agencies. In this article, Bates takes a look at the newly published policy, each of FinCEN’s national priorities, and what your firm and clients need to know. 

Bates Group is proud to welcome new Managing Director Rhonda Davis and Cobia Compliance to our AML and Compliance practices.