Monday, April 19, 2021
On March 3, 2021, the SEC’s Division of Examinations (formerly the Office of Compliance Inspections and Examinations (OCIE)) issued its examination priorities for 2021. In addition to broadly reiterating its continued focus on advisers’ fiduciary duties to their clients, the protection of retail investors and compliance with Regulation Best Interest and Form CRS; knowledgeable and empowered CCOs; conflicts of interest; environmental, social and governance (ESG) matters; and technology and cybersecurity in general, the Division also identified examination priorities that will be of particular interest to managers of both private and registered funds.
Cybersecurity Matters Related to COVID-19
Cybersecurity matters will continue to be a focus, especially those that may be exacerbated by remote work arrangements caused by the COVID-19 pandemic, including with respect to data protection, oversight of vendors, phishing, mobile and remote application
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The SEC’s thoughts on anti-money laundering cost more than a penny stock. Our Financial Services & Products Group examines a new risk alert from the Division of Examinations and what it means for future enforcement.
Trading in penny stocks
Affiliations with disreputable or conflicted individuals
The Securities and Exchange Commission’s (SEC) Division of Examinations (EXAMS) recently issued a risk alert detailing compliance concerns related to anti-money laundering (AML) obligations of broker-dealers. The risk alert chronicles various compliance deficiencies observed during recent examinations of broker-dealers’ suspicious activity monitoring and reporting obligations under the Bank Secrecy Act (BSA) and related regulations.
Date
14/04/2021
An indictment was unsealed today in the Eastern District of New York charging two defendants with failing to maintain anti-money laundering controls, failing to file suspicious activity reports, and operating an unlicensed money transmitting business.
As alleged in the indictment, from 2014 to 2016, Gyanendra Asre, 53, of Greenwich, Connecticut, and Hanan Ofer, 67, of New York, New York, devised and executed a scheme to bring lucrative and high-risk international financial business to small, unsophisticated financial institutions. Asre and Ofer were trained in anti-money laundering compliance and procedures, and represented to the financial institutions that, because of their experience and training, they understood the risks associated with the high-risk business and would conduct appropriate anti-money laundering oversight as required by the Bank Secrecy Act.
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Eighth Blog Post in an Extended Series on Legislative Changes to the BSA/AML Regulatory Regime
As we have
blogged, the Anti-Money Laundering Act of 2020 (“AMLA”) contains major changes to the Bank Secrecy Act (“BSA”), coupled with other changes relating to money laundering, anti-money laundering (“AML”), counter-terrorism financing (“CTF”) and protecting the U.S. financial system against illicit foreign actors. In this post, we review several provisions of the AMLA section entitled “Modernizing the Anti-Money Laundering and Countering the Financing of Terrorism System.” These provisions signal potentially significant changes in the BSA reporting regime for suspicious activity and currency transactions – albeit in the future, after the performance of studies and reports which Congress has required regarding the effectiveness of Suspicious Activity Report (“SAR”) and Currency Transaction Repo
Friday, April 9, 2021
SEC Announces 2021 Examination Priorities
The SEC’s Division of Examinations (Division), formerly known as the Office of Compliance Inspections and Examinations (OCIE), released its 2021 examination priorities. In its release, the Division noted that it completed over 2,952 examinations in 2020 and issued more than 2,000 deficiency letters. Approximately 15% of all registered investment advisers were examined during 2020 and the Division completed more than 100 examinations of investment companies. The Division also conducted hundreds of outreach calls to investment companies and advisers to assess market impacts of the COVID-19 pandemic. The 2021 priorities are grouped into the following categories, each of which is described below in more detail: