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 word of compliance and regulation as of October 13, 2023.
Uncovering cybersecurity challenges faced by family offices – Author Nora Macaluso
Cybercriminals are increasingly targeting family offices, with 26% reporting attacks, two-thirds of which occurred in the last year. Phishing and ransomware are major threats, often aimed at family members’ homes. The COVID-19 work-from-home trend has made these environments more susceptible. Many family offices lack robust cybersecurity measures, and it has been reported that 87% of executives’ personal devices lack security.
“The trend is becoming more and more clear that while the number of attacks is increasing daily, the number of successful attacks is still predominantly from within the organization,” said Helen Johnson, chief technology officer of the technology consulting firm COMPLY.”
Simple steps can enhance protection: appoint a dedicated cybersecurity concierge, create a crisis plan, train staff to spot scams, simulate attacks, back up data, undergo security audits and consider cyber insurance. Affordable security systems and email filters are accessible options to bolster defenses and protect against reputational risk.
900 Individuals Returned to Industry Using FINRA Continuing Ed Program – Author Melanie Waddell
The Financial Industry Regulatory Authority’s (FINRA) Maintaining Qualifications Program (MQP) has welcomed back over 900 individuals to the securities industry. MQP allows those who terminated their registration between March 15, 2020, and March 14, 2022, to maintain their qualifications for up to five years through annual continuing education. The program offers a flexible path for industry professionals to rejoin the sector, with nearly 20,000 participants, including 911 returnees, since its launch. The second enrollment period is open until December 31, offering more opportunities for industry professionals to stay current.
Advisors contend SEC crackdown on AI recommendations does not compute – Author Dan Shaw
The SEC’s proposal to regulate AI and robo-adviser use has sparked criticism from financial planning groups and firms, with concerns that it may undermine fiduciary principles. The proposed rule aims to prevent advisers from prioritizing their interests over investors’ by scrutinizing and eliminating conflicts arising from technology use. Critics argue that it could disrupt long-standing norms and apply to even basic technologies like spreadsheets. They also raise concerns that fees, including flat monthly charges, could be viewed as conflicts, potentially discouraging useful services. Regulators worry that clients may not be aware of incentives that don’t align with their best interests. The SEC is now reviewing the feedback to decide on the proposed rule.
SEC’s ‘cryptos are securities’ court appeal denied – Author Bloomberg News
US District Judge Analisa Torres has denied the Securities and Exchange Commission’s (SEC) request to appeal her ruling that Ripple Labs’ cryptocurrency, XRP, does not qualify as a security when sold to the public. The SEC sought permission to appeal as the judgment wasn’t final, and wanted to pause the suit against Ripple for allegedly offering unregistered securities during the appeal. The ruling is seen as a win for the crypto industry, distinguishing between sales to institutional investors and the public. A trial is scheduled for April. Ripple’s XRP token initially rose 6.3% before settling around 54 cents after the decision.
Wall Street hit with latest wave of fines in SEC WhatsApp probe – Author Bloomberg News
Multiple Wall Street firms have agreed to pay a collective sum of around $79 million in penalties to the U.S. Securities and Exchange Commission (SEC) over employees’ use of unmonitored communication channels. The firms were found to have violated regulations requiring the retention of business communications. These penalties add to the over $2.5 billion paid by big banks to the SEC and the Commodity Futures Trading Commission for similar investigations into the use of unmonitored communications. Regulators stress the importance of record-keeping to investigate wrongdoing effectively. The SEC has prioritized addressing record-keeping lapses.
Have question about recent trends and happenings in the financial regulatory compliance space? Schedule time to speak with an expert today!