Mistakes in computer coding by a high frequency trading firm that went undetected for approximately four years were responsible for approximately 12.6 million orders that violated Reg NMS, according to an Order settling an enforcement proceeding with Latour Trading LLC, announced by the SEC on September 30. These noncompliant orders involved more than $4.6 billion shares and had a notional value of $116 billion.
SEC to Conduct Second Round of Cybersecurity Examinations
On September 15, 2015, the Office of Compliance Inspections and Examinations (OCIE) of the Securities and Exchange Commission (SEC) issued a Risk Alert announcing its second round of examinations of registered investment advisers and broker-dealers under its cybersecurity examination initiative.
SEC Finds Metadata Contradicts CCO’s Statement In Examination
The SEC recently settled an enforcement action against an investment advisor, Parallax Investments LLC, its owner and its Chief Compliance Officer, finding that metadata in the CCO’s annual compliance memorandum contradicted the CCO’s statement to the SEC staff about his compliance review.
SEC Awards Compliance Officer Whistleblower Bounty of Approximately $1.5 Million
Earlier today, the SEC announced that it would pay an unidentified compliance officer a whistleblower bounty award of between $1.4 and $1.6 million. This is the second award that the SEC has made to a whistleblower with internal audit or compliance responsibilities. According to the SEC, the recipient of the bounty award “had a reasonable basis to believe that disclosure to the SEC was necessary to prevent imminent misconduct from causing substantial financial harm to the company or investors.”
First SEC Whistleblower Award To Former Company Officer
On March 2, 2015, the SEC announced an expected award of $475,000 to $575,000 to a former company officer “who reported original, high-quality information about a securities fraud that resulted in an SEC enforcement action with sanctions exceeding $1 million.” The officer reported information to the SEC more than 120 days after other responsible compliance personnel at the company in possession of the information purportedly failed to adequately address the issue. This is the first of its kind under the SEC’s whistleblower program, and the first award announced this year.
OCC No Longer Issuing Anti-Money Laundering Recommendations
Office of the Comptroller of the Currency (“OCC”) examiners stated on Monday that they will no longer make recommendations on how banks can better comply with anti-money laundering (“AML”) regulations. Rather, the policy change designates all AML problems either as matters requiring attention or as violations of law. Thus, all
Don’t Get Burned by the “Sunshine:” Risk Factors for Venture Capital Firms in an Era of Increasing SEC Scrutiny
Originally published in the Venture Capital Review, 2014 edition.
Andrew J. Bowden, the Director of the SEC’s Office of Compliance Inspections and Examinations, gave a speech entitled “Spreading Sunshine in Private Equity” in May 2014. While sounding cheery, the “spreading sunshine” metaphor was an ironic evocation of Justice Brandeis’s
AAG Caldwell Provides Guidance on Adequate Compliance Programs
Recently confirmed Assistant Attorney General of the U.S. Department of Justice Criminal Division, Leslie Caldwell, has laid out her views as to what comprises the “hallmarks of good compliance programs.” In her new position, AAG Caldwell will repeatedly be in the position to decide whether corporate compliance programs are sufficient when making charging and settlement decisions and so her views on the subject are of particular import.