Compliance & Ethics

The Securities and Exchange Commission (SEC) has filed charges against Jake Soberal and Irma Olguin, Jr., former co-CEOs of Bitwise Industries Inc., a private technology services startup based in Fresno, California. The charges stem from allegations that the executives misled investors about the company's financial health while raising approximately $70 million in 2022. Soberal and Olguin have agreed to settle the charges brought against them.

Morgan Stanley, a prominent player in the financial sector, is currently under the scrutiny of the Federal Reserve, particularly its wealth management division. This segment, which constitutes half of the bank's total revenue, is undergoing a thorough review due to concerns about potential lapses in dealing with wealthy foreign clients. The focus is on evaluating the effectiveness of the bank's due diligence and anti-money laundering (AML) protocols.

The Consumer Financial Protection Bureau (CFPB) has ordered Citibank, N.A. (Citi) to pay $25.9 million in fines and consumer redress for engaging in intentional and illegal discrimination against credit card applicants identified as Armenian American. The discriminatory practices took place between 2015 and 2021.

The Department of Health and Human Services (HHS) has delivered highly-anticipated guidance on compliance programs within the healthcare sector. This 91-page publication, titled "General Compliance Program Guidance," was released by the Office of the Inspector General (OIG), the HHS division responsible for enforcing healthcare compliance. The guidance serves as a comprehensive reference, aimed at providing clarity and support across various healthcare industry sectors. It complements the sector-specific guidance published by the HHS since 1998.

The Commodity Futures Trading Commission (CFTC) has unveiled its enforcement results for Fiscal Year 2023, highlighting a remarkable surge in digital asset cases, actions to hold registrants accountable for their regulatory obligations, manipulation and spoofing actions, and pivotal court decisions in complex litigations. The enforcement activities in 2023 underscore the CFTC's steadfast dedication to preserving the integrity, resilience, and vitality of the United States derivatives markets.

In a recent review, the Financial Conduct Authority (FCA) has underscored the need for financial firms to bolster their anti-fraud systems and enhance their support for victims of fraud. While the review acknowledged instances of commendable practices, it also expressed disappointment with certain firms' treatment of customers who had fallen victim to fraudulent activities.

Buffalo Grove, Illinois-based financial services and payments firm Swift Prepaid Solutions, Inc., operating under the trade name daVinci Payments (daVinci), has reached a settlement with the Office of Foreign Assets Control (OFAC), agreeing to remit $206,213 to resolve potential civil liability for a significant number of apparent violations related to OFAC sanctions programs targeting regions including Crimea, Iran, Syria, and Cuba. The violations took place between November 15, 2017, and July 27, 2022, and revolve around daVinci's management of prepaid reward card programs that enabled individuals in sanctioned jurisdictions to redeem rewards.