Compliance innovation moves fast, but the news moves faster. To keep you and your team up to speed on the latest happenings and goings-on in the compliance world, we’ve aggregated the top five articles from the past few weeks to provide you with an in-depth look at the regulatory ecosystem.
Stay up-to-date and in the know on everything happening in the compliance world as of Dec. 23, 2022.
Top five compliance articles
SEC Awards $37 Million to Whistleblower Who Gave Key Information – Author Stephanie Stoughton
The Securities and Exchange Commission (SEC) is awarding more than $37 million to a whistleblower. The information the whistleblower provided led to a successful SEC enforcement action. The whistleblower also receives credit for providing the information to the SEC within 120 days of providing the information to their company.
Creola Kelly, chief of the SEC’s Office of the Whistler, said, “The whistleblower here made persistent efforts to bring the conduct to the attention of the SEC, another agency and the company and is credited with the results of the company’s internal investigation.”
Whistleblower awards can range from 10 to 30 percent of the money collected when the monetary sanctions exceed $1 million. As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose any information that could reveal a whistleblower’s identity.
The ESG rule, the SEC and sustainability – Author Mark Schoeff, Jr.
The Department of Labor (DOL) set forth a regulation which would facilitate environmental, social and governance (ESG) principles in retirement investing. Following the revision of the regulation, the regulation has seen great support from powerful organizations in the investment industry.
The Investment Company Institute, which represents the mutual fund industry, praised the DOL for its “neutral” approach to ESG. The Investment Adviser Association opposed the original ESG proposal but supported the final version because the agency removed several provisions which would make it easier for investment advisers to comply.
How Enforcement Will Play Out in 2023: SEC Roundup – Author Nick Morgan and Tom Zaccaro
Former SEC senior trial counselors Nick Morgan and Tom Zacarro met to talk about the SEC’s annual enforcement report for 2022 and the enforcement areas the agency will likely focus on in 2023. Fiscal year 2022 was a record year for the SEC whith 760 enforcement actions, a 9% increase over the prior year.
According to experts in the industry, the SEC will focus on how firms use compliance consultants to help them manage their compliance programs and how compliance teams maintain and manage communications at their firm.
U.S. regulators warn about risks of deeper crypto-Wall Street ties – Author Allyson Versprille and Christopher Condon
In an annual report, the Financial Stability Oversight Council warned firms which utilize cryptocurrencies and traditional financial institutions could see more overlap in the future, which could put the broader system at risk.
This bolsters the concerns of top U.S. financial regulators and U.S. officials who have long worried those who operate in cryptocurrencies often operate in regulatory gray areas. This fear is only compounded in light of recent market turmoil, bankruptcy of crypto lenders and more.
To alleviate these concerns, regulators will have to quickly determine regulations and a means of monitoring this field to protect investors and participants.
SEC proposes sweeping changes to process for selling securities – Author Aaron Nicodemus
The SEC passed four proposals which would change the way securities are sold in the U.S. markets. These proposals would also create new disclosures for broker-dealers and others seeking to trade securities on behalf of retail investors.
The SEC developed these proposals to address concerns in the market. These proposals were intended to:
- Make it easier for retail investors to receive the best prices for their trades.
- Change broker-dealers’ obligations for what constitutes “best execution” of trades for retail investors.
- Require new disclosures on the treatment of retail orders.
The comment periods on the four proposed rules will remain open until Mar. 31, 2023, or 60 days after publication in the Federal Register, whichever is later.