MyComplianceOffice Blog

The U.S. Securities and Exchange Commission (SEC) recently released it’s report of enforcement actions for their fiscal year 2021 ending on September 30. 697 companies were hit with violations this year.

New actions were included against emerging threats in the crypto and SPAC spaces, but there was still plenty of enforcement in more traditional areas like insider trading, inadequate disclosure and breaching of fiduciary duty.

What types of misconduct landed individuals and firms on the SEC’s radar this year?

A consulting firm partner who was advising a global bank on the acquisition of a FinTech loan processing firm was charged by the U.S. Securities and Exchange Commission on two counts of securities fraud for illegal trading using material nonpublic information (MNPI). In a parallel action, criminal charges were also filed in the state of New York that bring a maximum sentence of twenty years in prison.

The Monetary Authority of Singapore (MAS) released a press release stating that three individuals were charged for illegally communicating non-public and material information and using such information to buy shares in a company. The investigation was jointly conducted by the Monetary Authority of Singapore and the Commercial Affairs Department of the Singapore Police Force.

During 2020, many factors have shaped the regulations and enforcement actions to maintain market integrity and place the interests of clients ahead of firms and individuals. In addition to the challenges faced by compliance and risk departments, the number of people trading worldwide has risen, pressuring regulators and compliance departments to quickly act to monitor conflicts of interest and prevent individuals from taking market advantage.

On September 23rd, the European Securities and Markets Authority (ESMA) published a set of outcomes and recommendations on the Market Abuse Regulation. The report has the objective to review the functionalities of MAR since its implementation in 2016 and draft suggestions to improve the regulation. The report is based on a 2019 consultation and covers buy-back programmes, the delayed disclosure of inside information, the usefulness of insider lists, managers’ transactions, the retention period of personal data among other topics.