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The weekly news source for investment management legal and compliance professionals

Supreme Court Sides with Prosecutors in Insider Trading Case

The U.S. Supreme Court on December 6 gave Justice Department and SEC prosecutors an early holiday gift: it unanimously rejected a challenge to a lower court ruling on an insider trading case. In doing so, the Supreme Court returned one of the standards by which insider trading cases are judged to approximately where it was prior to 2014.
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Guidance Clarifies Reliance on Predecessor Registrations

Five questions, five relatively clear answers. That’s what the SEC Division of Investment Management provides in its latest guidance on when and how investment advisers may rely on predecessor registrations. Attorneys and consultants providing counsel to investment advisory firms would be wise to use the guidance.
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Recent Stories

MJW: The SEC Needs More Powerful Enforcement Tools

Record-setting enforcement figures apparently aren’t enough. SEC chair Mary Jo White, in one of her final speeches prior to leaving her post before Donald Trump takes the presidential oath of office, advocated a number of amendments to civil and criminal law.
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Beware the CAT: More Scrutiny Likely After Approval of Trading Database Plan

The SEC will soon be able to track trading activity in domestic equity and options markets to within 100 microseconds. Once it is active, the Comprehensive Audit Trail (CAT) will allow the agency to conduct not only more focused investigation of broker-dealers, but also of advisers. The agency recently approved the plan to create this single, comprehensive database, which is expected to be up and running within two years.
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DOL Wins First Fiduciary Rule Challenge, But Trump Waits in the Wings

Will Donald Trump upset the Department of Labor’s Fiduciary Rule applecart after he takes office on January 20? The DOL on November 4 won the first challenge brought against the Rule in federal court. But with a president-elect Trump due to take office in about 10 weeks, do these court cases really matter? Does the Final Rule really matter?
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Stein Calls on SEC to Step Up on Data Technology

The SEC needs to get ahead of the data technology curve – or at least keep up with it. That, at least, appears to be the view of agency commissioner Kara Stein, who in a recent speech called on the agency to take advantage of opportunities data provides, and to overcome challenges that may get in the way of the SEC "keeping up" with data’s growing role in the markets. She also called for a new office within the agency to coordinate the creation of data strategy.
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Hiring a Cybersecurity Czar: How to Do It, What to Look For

No one wants to have their data, not to mention sensitive client information, misused or stolen. Advisory firms may already have some IT staff on board, but as cybercrimes become increasingly sophisticated and regulatory requirements increase, they may want to bring on board an individual to oversee everything cybersecurity, in other words, a cybersecurity czar.
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Risk Alert: Examiners on the Lookout for Whistleblower Intimidation

Examiners will be checking advisory firm and broker-dealer manuals and documents to make sure they contain no provisions that deter employees from reporting fraud or other problems, the SEC’s Office of Compliance Inspections and Examinations said in a new risk alert. Firms that want to avoid citation letters or possible enforcement action would be wise to review their policies and procedures before examiners do.
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DOL Clarifies Fiduciary Rule Exemption Requirements

Now we begin to find out what the Department of Labor’s Fiduciary Rule and the related Best Interest Contract Exemption really mean. The DOL, more than six months after issuing the Rule and the BIC Exemption for institutions providing retirement investment advice, on October 27 issued the first of what may be multiple rounds of answers to frequently asked questions.
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