News & Events –

Bates is proud to introduce four new experts and consultants: Jennifer Bergenfeld, Pamela O’Neill, Matthew Sekerke and Phil Swatzell.

Bates Group congratulates President Benjamin Pappas on his recognition as a 2019 "Forty Under 40" business leader by the Portland Business Journal.

In June 2018, Bates Group published an article reporting on deficiencies identified by FINRA in its exam findings which may trigger further scrutiny. In that article we noted FINRA’s focus on the Uniform Transfer to Minors Act (UTMA), among other exam topics. That scrutiny has now arrived in the form of FINRA inquiries/investigations into how accounts for UTMA and Uniform Gifts to Minors Act (UGMA) accounts are handled at financial services firms.

Bates Research interviews our most senior experts to get their perspective on the latest regulatory and compliance concerns affecting clients today. We sat down with R. Gerald (“Jerry”) Baker, a Consultant with Bates Compliance Solutions, and an expert with over 45 years of financial services and compliance experience, and asked him to share his observations on some of the current challenges confronting broker dealers and RIAs.

On March 13, 2019, the U.S. House of Representatives adopted a resolution, sponsored by House Financial Services Committee (HSFC) Chair Maxine Waters, declaring that “the lack of sunlight and transparency in financial transactions poses a threat to our national security and our economy’s security.” On the same day, a subcommittee of the HFSC considered legislative proposals aimed at modernizing the Bank Secrecy Act (BSA) and closing loopholes in the Anti Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework, including building on the use of beneficial ownership information collected under Customer Due Diligence (CDD) rules that went into effect last year. In this article, Bates Research continues its review of developing Congressional legislative efforts to detect and deter financial crime.

Bates Group Director Joseph “Joe” Thomas, Senior Investor Expert, will be speaking at the SIFMA Senior Investor Protection Workshop, April 3rd at Edward Jones in Tempe, AZ, on the panel “Protecting Your Senior Clients: Prevention, Identification and Action.” Panelists will discuss promising practices to help prevent, spot and address situations of financial exploitation and cognitive decline.

The North American Securities Administrators Association (NASAA) has been in the public eye this month as state regulators (i) issued a set of federal legislative priorities and (ii) provided written testimony to the U.S. House Financial Services Committee concerning the need for greater clarity on the SEC proposed Regulation Best Interest. In this article, we look at NASAA’s 2019 legislative and regulatory priorities and summarize NASAA president Michael Pieciak's (pictured at left) latest take on the SEC’s efforts to find an acceptable compromise on broker standards of conduct.

260 Global Defendants said to have Targeted 2 Million Americans, Mostly Elder

On March 7th, federal and state enforcement agencies announced they had embarked on a massive crackdown on financial fraud directed at seniors. As part of the “sweep,” the Justice Department reported the filing of criminal or civil charges against hundreds of alleged offenders as well as the launch of targeted public education efforts throughout the country. According to the United States Attorney General, the coordinated actions reached into every federal district across the country and served to underscore the government’s efforts to protect a vulnerable population and address this complex and widespread problem.

In our last post, Bates Research highlighted the CFPB's analysis of five years’ worth of SARs data relating to elder financial exploitation. The use of the information contained in these filings represents an attempt by regulators to create and use data to better understand the scope of the problem and to inform enforcement and public education efforts. In this article, we look at current efforts on the enforcement side, as represented by the actions undertaken last week.

This week at Bates Group: CEO Jennifer Stout is recognized by the Florida Securities Dealers Association in their March Member Spotlight, Managing Director Alex Russell is quoted in an Investment News article about 529 plan costs, and Susan Harper will be hosting a chat with the Attorney General of New York, Letitia James, at the NYSBA Women in Law Section's inaugural Trailblazer event on March 13, 2019. Bates Group will also be exhibiting at the 2019 IAA Compliance Conference March 14-15 in Washington, D.C.

FINRA’s 529 Share Class Initiative self-reporting deadlines have been pushed back one month to allow firms additional time to review their supervisory systems, procedures and past transactions to identify sales of 529 plan share classes. The extension also allows firms more time to consider additional information made available by FINRA (FAQs) and to determine whether to self-report.

A recent analysis by the Consumer Financial Protection Bureau (CFPB) of Suspicious Activity Reports (SARs) related to elder financial exploitation provides the most detailed look to date at the size and scope of this issue. Bates Group has been following the issue of senior financial exploitation for some time. The findings from the CFPB analysis affirm previous reports that senior financial abuse is pronounced, but that the current number of SARs filings “likely represent a tiny fraction of actual incidents.” In this article, we review the findings and recommendations contained in the new Report.

Firms participating in FINRA’s 529 Plan Share Class Initiative should act now to meet the regulator’s approaching April 1st deadline to self-report violations and submit a plan to remediate harmed clients. Bates looks at four distinct challenges facing firms as they prepare their response.

Bates Research recently conducted a Q & A session with Alex Russell, Managing Director of Securities Litigation & Regulatory Enforcement at Bates, to discuss FINRA's new 529 Share Class Initiative. Alex talks about responding by FINRA's deadline and potential pitfalls firms should avoid when preparing their response.

In our last review of developments concerning variable annuities and life insurance, Bates discussed the SEC’s issuance of a comprehensive new rule proposal intended to create a “layered disclosure approach” for regulating these products. That proposal was issued against the backdrop of an ongoing debate among state insurance regulators on revising model legislation on “Suitability in Annuity Transactions.” The National Association of Insurance Commissioners (NAIC) remains determined to create these standards and procedures for providing suitable recommendations to consumers, despite the likely impact and continuing uncertainty created by the unresolved SEC proposed Best Interest rulemaking.  

In this article, we update the most recent SEC action on variable contract disclosure as well as some important private sector activity, notably Ohio National Financial Services’ (“Ohio National”) strategic decision to pull out of the market for variable annuities.

Last week, Bates sent a time-sensitive Alert concerning FINRA’s new Share Class Initiative -- similar to the SEC’s Share Class Initiative, except that FINRA’s focus is on 529 savings plans.

Bates has deep and proven experience and expertise in share class disclosure matters. To support firms facing FINRA’s 529 Plan disclosure and remediation initiative, Bates has created a plan that provides essential end-to-end steps and solutions to identify and address accounts and clients impacted by share class selection.

For legislators and regulators, writing rules for crypto-related assets requires balancing the tension between innovation and entrepreneurship, and between sound markets and investor protection. Bates Research has previously described some of the definitional challenges which directly affect which agencies govern crypto assets. In this article, we review recent developments in the ongoing debate over regulating crypto, including legislative proposals, and regulatory activity by leadership at the SEC, the CFTC and FINRA.