MyComplianceOffice Blog

The SEC issued the Risk Alert Investment Adviser MNPI Compliance Issues to provide investment advisers, investors, and other market participants with information concerning notable deficiencies that the the Division of Examinations (“EXAMS”) has cited related to material non-public information (MNPI) and Code of Ethics Issues.

Have recent proposals foreshadowed a fundamental change to the regulation of private funds in the United States, including the alignment of private fund regulation with that of Registered Investment Companies (“RIC”) for retail distribution? According to Daryoush Niknejad, General Counsel of the Sanne Group, the proposed regulations of 2022 take a strong step in that very direction. 

It should come as no surprise to compliance teams that the management of Books and Records is in the regulatory spotlight. The U.S. Securities and Exchange Commission (SEC) recently charged several large Wall Street firms with widespread record keeping failures. The firms will be required to pay combined penalties of more than $1.1 billion, and also must make substantive improvements to their compliance policies and procedures around books and records.

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.