Compliance & Ethics

The Securities and Exchange Commission (SEC) has announced charges against five investment advisers for their failure to comply with regulations related to the safeguarding of client assets. Additionally, three of the firms faced charges for not promptly updating SEC disclosures concerning audits of their private fund clients' financial statements. As part of settlements, all five advisory firms have agreed to pay a combined total of over $500,000 in penalties.

The Securities and Exchange Commission (SEC) has taken action against Prime Group Holdings LLC, a private equity firm specializing in alternative real estate asset classes, for its failure to adequately disclose millions of dollars in real estate brokerage fees paid to a brokerage firm owned by its CEO. Prime Group has agreed to resolve the charges by paying a substantial penalty totaling $20.5 million.

The Financial Conduct Authority (FCA) has embarked on a comprehensive review of the treatment of domestic Politically Exposed Persons (PEPs) by financial services firms in the UK. This initiative aims to assess and enhance the handling of PEPs, who play a critical role in public service, by financial institutions.

The Swiss Financial Market Supervisory Authority (FINMA) has taken a significant step in bolstering anti-money laundering (AML) measures by publishing comprehensive guidance on money laundering risk analysis. This move aims to enhance transparency regarding the regulator's observations and insights gained from supervisory practices in this critical area of financial regulation.

Wise Payments Limited ("Wise"), a UK-based financial services provider, is under scrutiny after an investigation by the UK Office of Financial Sanctions Implementation (OFSI) revealed potential violations of sanctions imposed on Russia. The sanctions in question stem from The Russia (Sanctions) EU Exit Regulations 2019 and are aimed at restricting certain Russian individuals, entities, companies, and their subsidiaries from accessing and using their assets. These measures were put in place in response to Russia's actions, including its annexation of Crimea and its involvement in conflicts in Eastern Ukraine.

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.