Compliance & Ethics

The Securities and Exchange Commission (SEC) has reported a robust enforcement performance for fiscal year 2023, filing a total of 784 enforcement actions, marking a 3% increase over the previous fiscal year. The enforcement actions comprised 501 original ("stand-alone") actions, representing an 8% rise from the previous fiscal year. The SEC also initiated 162 "follow-on" administrative proceedings and 121 actions against issuers allegedly delinquent in their filings.

The legal profession is on the brink of a technological revolution, with a recent survey indicating that 73% of lawyers anticipate integrating Generative AI into their legal workflows within the next year. Wolters Kluwer, a global information, software, and service provider, conducted the survey, garnering insights from 700 legal professionals across law firms, corporate legal departments, and business services firms in the U.S. and Europe for its fifth "Future Ready Lawyer" report.

Corlytics, a leading provider of regulatory risk intelligence and compliance management solutions, has released its Q3 2023 global enforcement fines report, revealing a significant surge in fines to $5.65 billion. This marks a robust 30% increase compared to the cumulative penalties in the previous two quarters ($1.5 billion and $2.27 billion, respectively).

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.