SEC Proposes New Rule on Outsourcing by Investment Advisers What happened? On Wednesday, Oct. 26, 2022, the Securities and Exchange Commission (SEC) proposed a new rule and amendments regarding the due diligence of service providers. The proposal contains specific due diligence requirements that RIAs must fulfill when using third-party [...]
Typosquat Campaign Mimics 27 Brands to Push Windows, Android Malware What happened? A massive typosquat campaign has come to light with over 200 typosquatting domains impersonating 27 brands to push Windows and Android malware. Typosquatting is a method hackers use to impersonate well-known sites by creating fake websites using [...]
Electronic Communications Recordkeeping: SEC Examination Requests What happened? After landmark penalties against 16 Wall Street Firms, the message is clear: firms are expected to abide by the U.S. Securities and Exchange Commission’s (SEC) recordkeeping rules, especially around communication. Advisers’ use of electronic communications tools, such as text messaging, email, [...]
Uber’s 2016 Data Breach Cover-Up Results in Former Security Chief’s Conviction What happened? On Wednesday, Oct. 5, 2022, Joe Sullivan, former chief security officer for Uber, was convicted on federal charges related to a ransom payment he authorized following a 2016 security breach. Sullivan was convicted of obstructing justice [...]
SEC Reopens Comment Periods for Cybersecurity, ESG, and More What happened? In a surprising development, the U.S. Securities and Exchange Commission (SEC) announced that they would reopen the comment period on specific rulemaking releases between June 2021 and August 2022. The extension is due to “a technological error that [...]
16 Wall Street Firms Charged by the SEC for Widespread Recordkeeping Failures What happened? On Sept. 27, 2022, the Securities and Exchange Commission (“SEC”) charged 15 broker-dealers and one affiliated investment adviser for widespread and longstanding failures by the firms and their employees to maintain and preserve electronic communications. [...]
Failures to Safeguard Personal Information Costs Morgan Stanley Smith Barney $35 Million What happened? On Sept. 20, 2022, the Securities and Exchange Commission (“SEC”) charged Morgan Stanley Smith Barney LLC (MSSB) regarding the firm’s failures to protect the personal identifying information (“PII”) of approximately 15 million customers over a [...]
SEC Charges Two Advisory Firms for Custody Rule Violations Among Other Violations What happened? On September 9, 2022, the Security and Exchange Commission (“SEC”) charged several investment advisers who failed to comply with requirements regarding safekeeping client assets, and/or to timely update their SEC disclosures to reflect the status [...]
The SEC’s Strategic Plan for 2022-2026 Fiscal Years What happened? On August 24, 2022, the U.S. Securities and Exchange Commission (SEC) announced its plans for the 2022-2026 Fiscal Years including three main goals to advance its mission, according to a press release. The three primary goals and their sub-groups [...]
SEC Fines Adviser in Wrap Fee Program Dispute What happened? On August 26, 2022, Kovack Advisors, Inc. (“KAI”) settled with the U.S. Securities and Exchange Commission (“SEC”) for almost $900,000 following an order by the SEC instituting administrative and cease-and-desist proceedings against KAI. KAI offered wrap fee programs to [...]