Insights & Regulatory Updates
FINRA Dialing Back DEI and Racial Justice Initiatives Amid Conservative Pressure: A Call for Authentic, Impactful Change
The Financial Industry Regulatory Authority (FINRA) has made significant changes to its online content, quietly removing pages that promoted its diversity, equity, inclusion (DEI), and racial justice efforts. These revisions follow an increasing conservative backlash against DEI initiatives across multiple sectors.
Big Data Is Watching You: How the SEC Uses Advanced Analytics to Uncover Violations
The U.S. Securities and Exchange Commission (SEC) has long stood as the vanguard of financial market integrity, but in recent years, it has transformed into a sophisticated data-driven enforcement machine. By leveraging cutting-edge analytics, the SEC has fundamentally reshaped the landscape of securities regulation, ensuring that the most complex and well-disguised violations come to light. From insider trading and market manipulation to cherry-picking schemes and misconduct in the trading of structured products, the SEC's methods have become simultaneously more advanced and more efficient, making noncompliance an exceedingly risky gamble.
FINRA’s Proposed Changes to Rule 6500 Series Aim to Simplify SLATE Reporting
FINRA has issued a set of proposed amendments to Rule 6500 Series, which governs the Securities Lending and Transparency Engine (SLATE). These changes are designed to address feedback from market participants and to make the reporting process more manageable, while also expediting the implementation of the SLATE system.
How to Start a Hedge Fund: The Definitive Legal and Practical Guide
Establishing a hedge fund in the United States is a high-stakes, complex undertaking that requires not only a robust investment strategy but also a meticulous approach to legal and regulatory compliance. While the hedge fund world offers lucrative opportunities for those who succeed, it also comes with significant challenges. This handbook is designed to provide you with the most thorough, balanced, and actionable guide available on the internet, offering deep insights into each phase of the process. If you’re serious about starting a hedge fund, this is your essential roadmap.
Trump to Meet Privately With Coinbase CEO Brian Armstrong: What It Means for Crypto Regulation
President-elect Donald Trump is set to meet privately with Coinbase CEO Brian Armstrong on Monday, marking a significant moment for the cryptocurrency industry. According to sources familiar with the matter, the meeting is expected to focus on key personnel appointments for Trump’s second administration, potentially signaling a major shift in the regulatory landscape for digital assets.
SEC Charges BIT Mining with FCPA Violations in Connection with Bribery Scheme to Influence Members of Japanese Parliament
The Securities and Exchange Commission (SEC) has announced a significant enforcement action involving BIT Mining Ltd., formerly known as 500.com Limited, for violations of the Foreign Corrupt Practices Act (FCPA). The company has agreed to pay a $4 million civil penalty to resolve charges stemming from a bribery scheme that took place from 2017 to 2019. The scheme aimed to influence Japanese government officials, including members of Japan’s parliament, in an effort to establish an integrated resort and casino in the country.
Crypto Legislation Likely Coming Under Trump, Ex-SEC Chief Jay Clayton Predicts
As the United States braces for a shift in regulatory priorities, former SEC Chairman Jay Clayton announced on Wednesday that he anticipates significant legislative action on cryptocurrency under President-elect Donald Trump’s upcoming administration. Speaking at a gathering of securities lawyers in New York, Clayton hinted at a friendlier regulatory environment for the crypto industry, a stark contrast to the enforcement-heavy approach seen under President Joe Biden.
18 States Sue SEC and Gary Gensler for Alleged ‘Regulatory Overreach’ on Crypto
The Securities and Exchange Commission (SEC) and its Chair, Gary Gensler, are facing significant legal pushback from 18 Republican attorneys general, who have filed a lawsuit accusing the agency of overstepping its regulatory bounds in its enforcement actions against the cryptocurrency industry. The lawsuit, led by Kentucky Attorney General Russell Coleman, is a pivotal moment in the ongoing battle over the future of crypto regulation in the United States.
FBI Seizes Polymarket CEO’s Phone Following Trump Election Prediction
Federal authorities have raised eyebrows with a high-profile seizure of electronic devices from Polymarket CEO Shayne Coplan’s Soho residence. The early-morning raid occurred just a week after Polymarket, a decentralized prediction market platform, accurately forecast Donald Trump’s presidential election victory. This incident has sparked debate over the potential political motivations and broader regulatory implications for decentralized finance.
Gary Gensler Releases Statement Hinting at Resignation as SEC Chair
In a surprising turn of events, SEC Chair Gary Gensler has hinted at a potential resignation, marking a significant moment in the world of financial regulation. Speaking at the Practising Law Institute’s 56th Annual Institute on Securities Regulation, Gensler delivered a reflective address, acknowledging both the achievements and controversies of his tenure. His remarks have left industry insiders speculating about the future of the SEC, especially as the agency grapples with the rapidly evolving landscape of cryptocurrency and financial technology.
SEC Trends - November 2024
As the Securities and Exchange Commission (SEC) continues to evolve its examination and enforcement priorities, fund managers are increasingly in the spotlight. The SEC’s National Examination Program plays a critical role in promoting compliance, reducing fraud risk, and informing regulatory policy—all while serving as a key source of enforcement referrals. With these trends in mind, fund managers must be vigilant and prepared. Here’s what to watch for in 2024 and beyond.
A Second Trump Administration: Implications for the Securities Industry
With Donald J. Trump’s return to the White House confirmed on November 6, 2024, the financial industry is preparing for sweeping regulatory changes. From the banking sector to private funds, stakeholders are crafting detailed wish lists, hoping to shape the new administration’s economic and regulatory agenda. Trump’s victory is set to usher in a more business-friendly environment, with Wall Street and asset managers eagerly anticipating reforms.
Trump Hints at Recess Appointment for SEC Chair as Bitcoin Nears $90,000
The recent election of Donald Trump as the next president of the United States has sent shockwaves through the financial world, with Bitcoin and other cryptocurrencies experiencing an unprecedented rally. Bitcoin, the world’s largest cryptocurrency, hit a record high of nearly $90,000, buoyed by expectations of a more crypto-friendly regulatory environment under Trump’s leadership. The surge comes as Trump hints at making sweeping changes to the Securities and Exchange Commission (SEC), including replacing Chair Gary Gensler through a controversial recess appointment.
SEC Crackdown: Key Enforcement Trends in Cyber Disclosure, Director Independence, and Reg FD
The U.S. Securities and Exchange Commission’s (SEC) Division of Enforcement has intensified its focus on significant areas of compliance for public companies. Recent actions have targeted cybersecurity incident disclosures, director independence misrepresentations, and violations of Regulation Fair Disclosure (Reg FD). Here’s what you need to know about these developments and how they could impact your company.
SEC Division of Examinations 2025 Priorities
In a November 4, 2024, risk alert, the Division of Examinations (the “Division”) of the U.S. Securities and Exchange Commission (SEC) unveiled its strategic, risk-based approach to selecting registered investment companies for examination. The Division also shed light on its methodology for scoping exams and shared notable examples of common deficiencies encountered during recent reviews.
Navigating Complex Exemptions: SEC Compliance Questions on Securities Act Provisions
Professionals often encounter nuanced questions about SEC registration requirements under the Securities Act. This compliance blog addresses selected Securities Act provisions, focusing on real-world questions frequently posed by issuers navigating exempt offerings, dividend distributions, and registration complexities. Let’s explore common scenarios and their SEC guidance, covering Sections 2(a)(3), 2(a)(4), 2(a)(11), and 3(a)(9) as well as recent insights on securities offerings, transfer procedures, and beneficial ownership.
Compliance Guide: Disqualification of Felons and Other "Bad Actors" from Rule 506 Offerings
In 2013, the SEC introduced "bad actor" disqualification provisions under Rule 506 of Regulation D, implementing Section 926 of the Dodd-Frank Act. This compliance guide provides a comprehensive look at how these provisions impact issuers seeking to rely on Rule 506 exemptions, covering disqualifying events, exceptions, waiver processes, disclosure requirements, and transitional considerations.
Waivers of Disqualification under Regulation A and Rules 505 and 506 of Regulation D: Understanding Key Requirements and SEC Review
In the U.S. securities framework, issuers often rely on exemptions like Regulation A and Regulation D to raise capital without registering their offerings. However, certain disqualifying events can bar a company from using these exemptions, particularly if there has been past misconduct involving the issuer, its officers, or significant shareholders. This guide will explore the disqualification rules for exempt offerings, when waivers may be available, and the factors that the Securities and Exchange Commission (SEC) considers when reviewing waiver requests.
Securities Enforcement Forum D.C. 2024: Examining Enforcement in a Shifting Regulatory Landscape
The Securities Enforcement Forum in Washington, D.C. has become an annual fixture for professionals navigating securities enforcement. This year’s conference on November 6, at the Mayflower Hotel, promises to provide a nuanced examination of regulatory shifts and enforcement priorities in the wake of the U.S. election.
Choosing the Right Cap Table Platform: A Guide for Entrepreneurs
A well-maintained cap table is the unsung hero of a successful startup. It’s not just a table—it’s a complete, precise, and evolving record of your company’s ownership structure, from shares and options to complex vesting schedules and SAFE notes. Your cap table reflects each owner’s economic interest, voting rights, and claim to future profits. And when managed correctly, it’s a core asset that keeps your company’s foundations rock-solid, allowing you to focus on growth without fear of surprises or costly fixes down the road.