Compliance & Ethics

Six prominent private equity and hedge fund trade groups have filed a lawsuit against the U.S. Securities and Exchange Commission (SEC), alleging that the regulatory agency exceeded its statutory authority in implementing new rules concerning expenses and fees. The legal challenge follows the SEC's recent adoption of extensive regulations aimed at enhancing transparency and competition within the private funds industry, which manages an estimated $20 trillion in assets.

In a significant development, a division of Goldman Sachs' transaction banking business (TxB) has halted onboarding riskier financial technology clients following a stern warning from the U.S. Federal Reserve earlier this year. This decision comes in response to concerns raised by the Federal Reserve regarding risk management and compliance within the division.

Plug Power Inc., a global leader in comprehensive hydrogen solutions for the green hydrogen economy, has recently announced the resolution of a civil administrative proceeding with the U.S. Securities and Exchange Commission (SEC). The settlement is related to the company's previous announcement on March 16, 2021, which stated that the financial statements in its annual reports on Form 10-K for 2018 and 2019, as well as its quarterly reports on Form 10-Q for 2019 and 2020, should no longer be relied upon.

Rapid advancements in artificial intelligence (AI) technologies, exemplified by projects like Microsoft-backed OpenAI's ChatGPT, are driving governments around the world to grapple with the complexities of creating effective regulations for AI deployment. As AI becomes increasingly integrated into various aspects of society, governments are working to strike a balance between fostering innovation and safeguarding ethical, legal, and privacy considerations.

Federal investigators are delving into allegations that funds from Tesla, the innovative electric car company led by CEO Elon Musk, were potentially misappropriated for the development of a massive glass house for Musk himself. The inquiries, spearheaded by both the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), are aimed at ascertaining whether company resources were improperly diverted for personal use.

The U.S. Securities and Exchange Commission (SEC) has taken action against Citigroup Global Markets Inc, issuing a cease-and-desist order in response to alleged willful violations of record-keeping requirements within the company's underwriting business. The order comes with a $2.9 million penalty, and while Citigroup has agreed to the terms, it has not admitted to the findings.

The Financial Conduct Authority (FCA) has taken action against Raymond James Investment Services, placing several restrictions on the firm's activities. The restrictions come as part of an effort to regulate the company's operations and safeguard investor interests.