Welcome to our biweekly recap, where we curate the top compliance news and insights from various industry publications. We have selected the most relevant and important updates related to regulatory compliance, industry news, and critical updates.
Today’s recap focuses on the DOL Fiduciary Rule, the SEC’s new approach to crypto, FINRA’s AI warning, and the FCA’s actions against misleading advertisements.
Here are our top compliance articles as of February 14, 2025:
DOL Hits Pause on Fiduciary Rule Appeal (Author – Melanie Waddell, Think Advisor)
The Department of Labor (DOL) has paused its appeal of the fiduciary rule, which was designed to ensure that financial advisors act in the best interests of their clients when providing retirement advice4. This rule has faced significant legal challenges, leading to its delay. The DOL’s decision to halt the appeal indicates a potential reevaluation of the rule’s future and its implications for the financial advisory industry
SEC’s Peirce says agency wants new approach to crypto (Author – Nicola M. White, Financial Planning)
SEC Commissioner Hester Peirce, often referred to as “Crypto Mom,” advocates for a more flexible and innovative framework that accommodates the unique characteristics of cryptocurrencies and other digital assets. She emphasizes the need for clear guidelines that foster innovation while protecting investors, and criticizes the current regulatory environment for being too rigid and stifling growth in the digital asset space. Peirce’s stance highlights the ongoing debate within regulatory bodies about how best to oversee the rapidly evolving digital asset market.
FINRA warns of AI use in sophisticated scams (Author – Dan Shaw, Financial Planning)
The Financial Industry Regulatory Authority’s (FINRA) annual regulatory oversight report, which emphasizes the increasing use of artificial intelligence (AI) and cybersecurity as top priorities, warns that fraudsters are leveraging AI and other technologies to execute sophisticated scams, including using deepfake audio and visual impersonations of financial experts to deceive investors. The report also notes that legitimate uses of AI in the financial industry are being approached cautiously, with firms using AI primarily for tasks like summarizing information and verifying transaction accuracy.
SEC reassigns top litigator behind crypto lawsuits (Leo Almazora, Investment News)
The SEC has reassigned Jorge Tenreiro, a key litigator involved in numerous lawsuits against cryptocurrency firms, to a different role within the agency’s information technology office. This move comes as the SEC, under new leadership, appears to be shifting its approach to crypto regulation. Acting SEC Chairman Mark Uyeda has announced a task force led by Commissioner Hester Peirce to reevaluate the agency’s crypto enforcement strategy. Peirce has been critical of the SEC’s previous enforcement actions, which were spearheaded by former Chair Gary Gensler and targeted major crypto firms like Coinbase Global. The reassignment of Tenreiro and the formation of the task force signal a potential change in the SEC’s regulatory stance towards the cryptocurrency industry
FCA steps up action against misleading financial adverts (FCA)
The Financial Conduct Authority (FCA) has taken significant action against misleading financial advertisements, resulting in the withdrawal or amendment of over 10,000 financial promotions in 2023, a 17% increase from the previous year. The FCA has also issued 2,285 alerts to prevent consumers from falling victim to scams, with a particular focus on illegal cryptoasset promotions. The regulator has expressed concerns about the rise of financial influencers, or “finfluencers,” who promote financial products on social media, often targeting younger audiences. The FCA’s new rules require authorized firms to obtain permission before approving promotions for unregulated persons, ensuring that firms have the necessary competence and expertise. This initiative is part of the broader Consumer Duty, which mandates that firms provide clear, fair, and accurate information to help consumers make informed financial decisions.
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