FiSolve Weekly News Digest (August 16, 2024)

Here is what we are reading in the news this week.?

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In yet another U.S. Securities and Exchange Commission enforcement action for recordkeeping violations - specifically, regarding "off-channel" communications - charges were announced against 26 broker-dealers, investment advisers, and dually registered BD/IAs for widespread and longstanding failures by the firms and their personnel to maintain and preserve electronic communications. ?The firms collectively agreed to pay combined civil penalties of more than $392 million and agreed to certain remedial undertakings. ?Some of the firms were assessed significantly lower financial penalties for self-reporting the violations.? Read more at https://www.sec.gov/newsroom/press-releases/2024-98?

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The U.S. Securities and Exchange Commission brought charges against a New York-based broker-dealer, for failing to file numerous Suspicious Activity Reports (SARs), for a period of more than three years. ?The SEC order finds the firm failed to adopt or implement reasonably designed anti-money laundering policies and procedures to surveil transactions conducted through its Alternative Trading Systems for potential red flags of suspicious activity.? Consequently, the firm did not file a single SAR over the three-year period.? The firm agreed to pay $1.19 million to settle the charges.? Read more at https://www.sec.gov/files/litigation/admin/2024/34-100692.pdf.?

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According to one report, an upcoming salary bump may be coming for employees in the financial services space, including traditional asset managers, alternatives and investment banking & insurance.? Johnson Associates, Inc. is projecting year-end incentives to be higher across almost all financial services sectors.? While the report cautions its projections with certain caveats, traditional asset management employees are expected to see incentive pay increases of 5% to 10% by the end of 2024 after several years of tighter spending.? This would mark the first increase in bonus pay since 2021.? Hedge fund incentives are projected to rise on inflows and strong performance, while investment banking projects higher as capital markets activity rebounds from multi-year lows.? Access the report at https://johnsonassociates.com/wp-content/uploads/2024/08/Johnson-Associates-Q2-Comp-Estimates-1.pdf.?

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The U.S. Commodity Futures Trading Commission (CFTC) announced the issuance of a consent order of permanent injunction and monetary relief by the U.S. District Court for the Southern District of New York against two related crypto firms.? The firms were ordered to pay $12.7 billion in monetary relief to customers and victims of a fraudulent scheme.? This is one of the largest CFTC enforcement actions to date.? Read more at https://www.cftc.gov/PressRoom/PressReleases/8938-24.? ?????

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The Financial Conduct Authority censured an auditing firm for failing to prepare client assets reports to the required standard.? The firm failed to notify the FCA of rule breaches by firms it had audited, which the FCA found could have put customers’ money at risk.? Specifically, the FCA found the firm failed to report 25 breaches of the rules by firms it had audited. These ranged from failings in documentation, to firms' assets being held alongside client assets.? Read more at https://www.fca.org.uk/news/press-releases/fca-censures-auditor-failings-client-asset-reports.

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