News & Events –

The SEC Office of Compliance, Inspections and Examinations (OCIE) issued a Risk Alert to remind investment advisers of their compliance obligations for principal trading and agency cross transactions involving clients. Specifically, OCIE alerted investment advisers of their responsibility to comply with disclosure and consent requirements under the Investment Advisers Act and that, except for specific circumstances related to cross trades, the rules require compliance on a “transaction-by-transaction basis – blanket disclosure and consent are not permitted.”

In a new Regulatory Notice, FINRA is asking its members a series of questions about the utility of rules and processes to curb financial exploitation of senior investors. According to FINRA, the rules under review provide a way for member firms to deal with situations where there is “a reasonable basis to believe that financial exploitation has occurred, is occurring, has been attempted or will be attempted.”

Bates Research closely follows regulatory and enforcement developments on senior financial fraud. In this article, we recap those rules and consider the questions posed by FINRA in its latest Notice.

The SEC’s adoption of the Regulation Best Interest (“Reg BI”) package in June was a defining moment in the long-running debate over the standard of care for broker-dealers and investment advisers. It triggered compliance schedules and required registered broker-dealers and advisory firms to develop internal policies and procedures in order to satisfy the new standards. The passage of Reg BI, however, did not quell the ongoing controversies over the appropriateness and adequacy of standards and investor protections. This week, Reg BI suffered another state challenge, this time in the form of a lawsuit filed against the SEC by seven State Attorneys General. Bates Research takes a closer look.

Bates is proud to share the publication of “With Regulation BI, Are FINRA Rules 2010 and 2111 Dead?” by Managing Director and Expert Consultant Hank Sanchez, Esq. Look for Hank at the 2019 NSCP National Conference, October 21-23 at the Hilton Baltimore. 

Bates Group welcomes Dennis Greenberg as the new Managing Director of Business Development for Bates AML and Financial Crimes.

Bates Group director and expert Greg Kyle was recently interviewed by CBS News for their MoneyWatch feature.

The past few months have been a particularly busy time for state financial regulators and enforcement officials. At almost every turn, the complicated and overlapping relationship between federal and state officials is being tested. A review of recent activities by the North American Securities Administrators Association (NASAA) provides several examples. In this article, Bates recaps recent NASAA developments on cryptocurrency, fraud enforcement, Regulation Best Interest (Reg BI), and supervision of complex financial products (i.e. non-traditional Exchange Traded Funds).

Bates Group’s Compliance Director Jill Ehret will be speaking at the 2nd Annual FI Summit on Wednesday, August 14th at the LA Galaxy Stadium. Bates is a proud co-sponsor of this year's event.

Bates Group’s new Managed Document Review services enable organizations to leverage the advantages of highly experienced review specialists and technology-enabled e-discovery review solutions allowing you to focus your time and effort on the high-value tasks your legal team was hired to perform.

Last week, the New York Supreme Court upheld the “Suitability and Best Interest in Life Insurance and Annuity Transactions” regulation (a/k/a Regulation 187) in the face of legal challenges brought by several associations and insurance agent groups. In this article we take a look at what the decision means, recent developments in both the SEC and NAIC efforts to rewrite standards, and we update you on the latest in the legal battle over commission trails for brokers selling variable annuities.

The growing global cannabis market is estimated to reach $66.3 billion by 2025, up from $13.8 billion in 2018. That kind of growth is spurring congressional and state legislators to seek to normalize the market for marijuana-related businesses and speed up the resolution of federal-state legal conflicts. In this article Bates looks at some of the recent federal legislative and state developments on what appears to be real momentum toward a fully functioning and legitimate market.

The SEC Office of Compliance, Inspections and Examinations (OCIE) issued a Risk Alert to address compliance and disclosure issues raised in examinations covering the oversight practices of SEC-registered investment advisers “that previously employed, or currently employ, any individual with a history of disciplinary events.” OCIE also proposed a number of ways that firms could address the weaknesses in their compliance frameworks related to supervised individuals with a prior history of disciplinary events.

After analyzing data collected in Suspicious Activity Reports, FinCEN issued an update to a 2016 Advisory alerting financial institutions on how best to combat criminal schemes that compromise business email accounts. The problem of criminals targeting business fund transfers is not small. So-called “Business Email Compromise” scammers possibly stole billions of dollars from companies and individuals in 2018, more than in prior years, according to a new FinCEN Financial Trend Analysis of the SARs data. In this article, Bates considers the informed guidance in FinCEN’s new 2019 Advisory to financial institutions, as well as some of the salient conclusions drawn from the trend analysis report.

Josephine Vu is Bates Group's new Director of People and Culture.

A. Christine Davis, Bates Group's Director of Forensic Accounting and Financial Crimes, is on the faculty of Practising Law Institute's CLE program "Basics of Accounting for Lawyers 2019," taking place July 23-24, 2019 in San Francisco. The two-day program reviews how some common accounting concepts may emerge in legal work, and what lawyers should consider when encountering them. 

Bates Group is alerting counsel that we are seeing an uptick in option-related cases where firms offered their clients strategies to increase the yield in their investment portfolio, often involving options trading in order to earn premium income to enhance a portfolio’s regular returns. Bates staff and experts have provided both consulting and testimony services in matters involving options trading within a client account.