Insights & Regulatory Updates
SEC Charges Keurig Over Misleading Recyclability Claims of K-Cup Pods
On September 10, 2024, the SEC charged Keurig Dr Pepper Inc. (Keurig) with making misleading statements regarding the recyclability of its widely used K-Cup coffee pods. The action is part of the SEC’s ongoing initiative to combat “greenwashing”—the practice of making exaggerated or unsubstantiated claims about a company’s environmental practices or products.
SEC Enforcement Sweep Targets Companies and Insiders for Late Filings under Section 16 and 13(d), (g), and (f)
The SEC’s fiscal year is winding down, and once again, we are seeing what is becoming a predictable, if not formalized, year-end tradition: a broad Enforcement sweep targeting companies and insiders for failing to meet timely filing requirements under Sections 16(a), 13(d), 13(g), and 13(f) of the Exchange Act. This year, 23 respondents—both corporate entities and individuals—were charged for violations stemming from late short-swing trading reports (Forms 3, 4, and 5) and beneficial ownership reports (Schedules 13D and G). Penalties ranged from $10,000 to $750,000, totaling more than $3.8 million. The SEC’s use of data analytics to identify these reporting failures continues to demonstrate the agency’s commitment to leveraging technology to enforce even technical compliance obligations.
New FinCEN AML Rule Brings Heightened Scrutiny to Registered and Exempt Reporting Investment Advisers
On August 28, 2024, the Financial Crimes Enforcement Network (FinCEN) finalized a rule that imposes new Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) program requirements on registered investment advisers (RIAs) and exempt reporting advisers (ERAs). For the first time, these advisers will be formally recognized as “financial institutions” under the Bank Secrecy Act (BSA), and thus subject to its AML/CFT regulations. The new rule will go into effect on January 1, 2026, signaling a significant shift for both RIAs and ERAs, who will need to implement comprehensive compliance programs to meet these requirements.
Untangling the SEC's Web: Regulatory Challenges Facing Crypto and Digital Assets
Under the leadership of Chairman Gary Gensler, the Securities and Exchange Commission (SEC) has adopted an approach to digital assets that some have described as "enforce first, make rules never." This strategy, while potentially effective in areas where clear guidance exists, has left digital asset market participants in the United States facing significant regulatory uncertainty. Without clear rules, the SEC’s aggressive enforcement tactics have had the effect of stifling innovation and driving businesses overseas. This article explores the key issues in the SEC’s current stance on digital assets and the need for a more thoughtful and predictable regulatory framework.
Equity Crowdfunding: A Comparison of Reg A, Reg CF, and Reg D
In the ever-evolving landscape of modern capital formation, the avenues available to entrepreneurs are both myriad and complex. Navigating the regulatory intricacies of Regulation A (Reg A), Regulation Crowdfunding (Reg CF), and Regulation D (Reg D) transcends mere compliance; it is a strategic imperative that can profoundly shape the trajectory of a business. Each regulatory framework not only delineates specific parameters regarding investor eligibility and funding caps but also carries distinct implications for ongoing disclosure and market engagement.
Broker-Dealers vs. Unregistered Finders in Capital Raising
Determining whether an intermediary operates as a finder or an unregistered broker-dealer is a nuanced and fact-specific inquiry that can present significant challenges. For unwary entrepreneurs, corporate executives, and equity fund sponsors, the stakes are high; engaging a third party that inadvertently crosses the line into broker-dealer territory can result in serious regulatory repercussions.