Posts Tagged ‘SEC enforcement’
The Second Act of SPACs Enforcement
Last week the Securities and Exchange Commission took its first enforcement action against a special purpose acquisition company (SPAC), in a case involving poor due diligence and misleading disclosures to investors. We should expect more such cases in the future, but there’s also another realm of compliance risk for SPACs that needs more attention. The…
Read MoreOur First SPAC Enforcement Action
Well that’s one way to crash and burn: the SEC has charged a SPAC and the space technology company it was trying to acquire with misleading investors about the deal’s proposed risks — including national security questions raised about the space company’s founder — ahead of a proposed merger next month. The tale is rather…
Read MoreLessons From Robinhood
FINRA served up an eye-popping enforcement action this week, hitting online trading app Robinhood with a $70 million fine — the largest ever in FINRA history — for a host of poor business practices and misleading statements made to Robinhood customers over the years. The settlement order is 123 pages long, so clearly it will…
Read MoreExample of Cybersecurity Disclosure Failures
The Securities and Exchange Commission has fined a New York title insurance company $488,000 for failing to disclose cybersecurity problems to investors in a timely manner, in yet another example of how cybersecurity risks can spawn a secondary wave of compliance risks too. The company in question is First American Financial Corp., parent company of…
Read MoreA Suspicious Activity, Cybersecurity Mess
A broker-dealer firm in Colorado has agreed to pay $1.5 million to settle charges with the SEC that the firm failed to file suspicious activity reports about cybersecurity thieves trying to take over customers’ accounts. It’s a sobering example of how weak cybersecurity controls can spill over into regulatory compliance trouble. The firm in question…
Read MoreNew SEC Enforcement Chief Quits
The new director of the SEC Division of Enforcement, Alex Oh, resigned today after less than a week on the job, apparently due because of some dispute related to a class-action lawsuit against Exxon Mobil, one of her clients in private practice. Oh was announced as the new enforcement director on April 22. She came…
Read MoreSEC Warns on Penny Stocks, Compliance Programs
Broker-dealer firms have another warning from the SEC to do better with AML compliance and suspicious activity reporting, and particularly to do better with customers’ trading in penny stocks and acting on known red flags with that type of transaction. The message came from the SEC’s Division of Examinations, which published its latest risk alert…
Read MoreSEC Enforcement Speech: Umm, Wow
Compliance officers, clear your schedule and retreat to your reading nook! We have an important speech to consider on the future of enforcement at the Securities and Exchange Commission. Commissioner Caroline Crenshaw, a Democratic appointee who joined the SEC only seven months ago, spoke Tuesday at the spring meeting of the Council of Institutional Investors…
Read MoreClimate Action Heats Up at SEC!
More news this week about the Securities and Exchange Commission’s approach to climate change: the Enforcement Division has created a new task force to examine corporate disclosures about climate and ESG issues; and the two Republican commissioners on the SEC published a warning shot against the agency’s new climate change enthusiasm. Let’s start with the…
Read MoreSEC Lists Examination Priorities for 2021
The Securities & Exchange Commission has released its list of 2021 examination priorities for broker-dealers and investment advisers, with a heap of attention paid to business continuity, climate change disruptions, and how the pandemic has amplified risks to cybersecurity and supervision. The SEC’s Division of Examinations (previously known as the Office of Compliance Inspections &…
Read More