United States

Topic: Enforcement

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Return of the monitorship: SEC and DOJ settle US$84M FCPA claims and impose monitorship on medical waste services company

In October 2021, Deputy Attorney General Lisa Monaco announced revised US Department of Justice (DOJ) guidance on corporate monitorships, signaling a sharp change in the declining trend of the tool over the past few years. (NRF has previously examined the DOJ’s policy changes.) Recently, the DOJ and the US Securities and Exchange Commission (SEC) announced … Continue Reading

NRF contributes chapter to GIR’s Practitioner’s Guide to Global Investigations

The UK and US white-collar crime teams have again authored the chapter Production of Information to the Authorities in the sixth and latest edition of Global Investigations Review – The Practitioner’s Guide to Global Investigations. Information requests from regulators continue to raise a host of complex legal and practical issues for entities and individuals. The chapter sets … Continue Reading

Financial Institutions – Regulatory outlook for 2022

As 2021 draws to a close, we look ahead to the trends and new requirements that we may see over the next twelve months for financial institutions (FIs) in the white collar crime sphere as regulators, legislators and individuals continue to adapt to the pandemic and prevailing public opinion. 1. An increase in fraud-related investigations … Continue Reading

US Congressional subcommittee expands its investigation into FinTech companies and pandemic fraud

Like the US Department of Justice, Congress is sharpening its focus on lenders and FinTech companies who facilitated pandemic-relief programs. In the latest development, the United States House Select Subcommittee on the Coronavirus Crisis issued letters to two companies demanding documents and responses to specific questions. It is clear that investigations into pandemic-relief fraud are … Continue Reading

Employees’ use of off-channel communications – growing regulatory interest on both sides of the pond

One of the key risks that financial institutions both sides of the pond are currently grappling with relates to the use by employees of “off-channel” communications.   These are typically communications not monitored by the institution and not retained under various regulators’ business records requirements.  Despite most companies having a policy that prohibits the use … Continue Reading

Post script: Airbus subsidiary pleads guilty to corruption offence

On 28 April 2021, Airbus’ UK subsidiary GPT Special Project Management Ltd (GPT) was convicted of corruption and sentenced to pay penalties of over £30m by the Crown Court in London. This case preceded the wider investigation into Airbus culminating in its US$3.9 billion global deferred prosecution agreement in 2020 (see our previous article here). … Continue Reading

Financier Worldwide Magazine feature – Regulatory futures: challenges and opportunities in 2021

Throughout 2020 and 2021, financial services firms have had to respond and adapt to a number of regulatory challenges in an unprecedented fashion. Firms now have to navigate a diverging regulatory landscape as a result of Brexit, at the same time as continuing to respond to an array of pandemic-related risks that have arisen. Nevertheless, … Continue Reading

Production of information to government authorities: a combined US and UK review

Information requests from regulators can raise a host of complex legal and practical issues for entities and individuals. Our experts in this field have set out the key considerations around the production of information to UK and US regulators, including information-gathering powers, privilege issues and increased global data sharing. Information-gathering powers Many UK regulators have … Continue Reading

New York State imposes a $1.5 million penalty in cybersecurity breach case

On March 3, 2021, the New York Department of Financial Services (NYDFS) announced a Consent Order with a NYDFS-licensed Maine-based mortgage banker and loan servicer settling alleged violations of the NYDFS cybersecurity regulations. (In the matter of Residential Mortgage Services, Inc., March 3, 2021). As a result of the regular safety and soundness examination of … Continue Reading

SEC’s Division of Examinations Releases Risk Alert for Digital Asset Securities

On February 26, 2021, the Securities and Exchange Commission’s (“SEC”) Division of Examinations (the “Division” and formerly known as “OCIE”) released a Risk Alert (the “Risk Alert”) reminding market participants – investment advisers, broker-dealers, exchanges, and transfer agents – of the framework surrounding digital assets that are securities (“Digital Asset Securities”). The Division also set … Continue Reading

SEC Settles with BlueCrest: Algorithmic Trading and AI-Based Strategies Must be Disclosed to Investors

On December 8, 2020, BlueCrest Capital Management Limited (“BlueCrest”), a UK-based investment adviser, agreed to a $170 million settlement with the Securities and Exchange Commission (“SEC”) to settle charges involving insufficient and misleading disclosures to investors that BlueCrest was also operating a proprietary, internal fund, moving its best traders to such fund and replacing the … Continue Reading

Dealers in antiquities added to the list of businesses to be subject to AML compliance requirements

The National Defense Authorization Act was enacted on January 1, 2021, after the US Senate joined the House of Representatives in overriding a presidential veto of the bill. In addition to authorizing appropriations for the Department of Defense, the new law also contains several provisions designed to improve policies and procedures aimed at policing money … Continue Reading

Congress Expands SEC Disgorgement Authority

On January 1, 2021, the National Defense Authorization Act became effective after Congress overrode President Trump’s veto. Although unrelated to national defense issues, Section 6501 of the legislation amends Section 21(d) of the Securities Exchange Act of 1934 to double the SEC’s statute of limitations for seeking disgorgement of a defendant’s unjust enrichment from five … Continue Reading

New whistleblower provisions for reporting AML violations

The National Defense Authorization Act was enacted on January 1, 2021, after the Senate joined the House in overriding President Trump’s veto of the bill. In addition to authorizing appropriations for the Department of Defense, the new law also contains several provisions designed to improve policies and procedures aimed at policing money laundering and terrorism … Continue Reading

New beneficial ownership requirements should help with AML KYC obligations

When banks and certain other financial institutions open accounts for entities, among other anti-money laundering (AML) customer identification requirements, they must obtain beneficial ownership information on individuals owning 25% or more of the entity and a person with significant control over the entity such as a president or chief executive officer. We have published several … Continue Reading

SEC continues to allow broker-dealers to rely on investment advisers for customer KYC requirements

In a December 9, 2020, letter, the US Securities and Exchange Commission (“SEC”) extended its no-action relief to broker-dealers in securities (“broker-dealers”) that wish to rely on investment advisers to perform the broker-dealer’s obligations under US federal anti-money laundering (“AML”) customer identification program and beneficial owner identification regulations. First provided in 2004 regarding customer identification … Continue Reading

New SEC Final Rule clarifies whistleblower program

On September 23, 2020, the US Securities and Exchange Commission (SEC) adopted a Final Rule, effective 30 days after publication in the Federal Register, regarding various aspects of its whistleblower program (the Program). Two points are particularly noteworthy. First, the SEC “clarified” that it has the authority and discretion to adjust large awards. Second, there … Continue Reading

FinCEN finalizes AML requirements for certain banks; asks for comments on possible rulemaking on AML compliance programs

On September 15, 2020, the Financial Crimes Enforcement Network (FinCEN), the US anti-money laundering (AML) agency, published a final rule that completes the circle of all banking organizations being treated the same for purposes of AML compliance requirements for banks. The final rule covers banks that do not have a Federal functional regulator, such as … Continue Reading

US banking agencies and FinCEN issue statements regarding AML enforcement

Last month the US federal banking agencies (the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, and the National Credit Union Administration, collectively, the “US banking regulators”) and the Financial Crimes Enforcement Network (“FinCEN”) the US anti-money laundering (“AML”) agency, issued statements providing guidance on their … Continue Reading

FINRA (and selected SEC) regulatory matters at a glance: What compliance officers need to know

Glen Barrentine is Of Counsel in the New York office of Norton Rose Fulbright. His practice focuses broadly on SEC regulated financial service clients, including broker-dealers, securities exchanges, municipal advisors and investment advisers. Glen frequency represents clients in connection with SEC and FINRA enforcement proceedings and other contentious regulatory inquiries, purchases and sales, and the … Continue Reading
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