Compliance & Ethics

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.

Singapore's largest bank, DBS, is grappling with financial exposure of approximately S$100 million (US$73.8 million) in connection with a recent money-laundering scandal that has rocked the city-state, according to the bank's chief executive, Piyush Gupta. He made this revelation during a press briefing on Monday, shedding light on the bank's involvement in the ongoing investigation.

In a significant policy shift, U.S. regulators have cleared the path for an increased oversight of asset managers, hedge funds, and other non-bank financial institutions that are perceived to pose potential risks to the country's financial system. This move marks the revival of a robust regulatory framework that had been sidelined during the previous administration of President Donald Trump.

The Securities and Exchange Commission (SEC) has announced charges against John Hughes, the President and Chief Compliance Officer (CCO) of Prophecy Asset Management LP, a registered investment adviser. The charges come in connection with a multi-year fraud scheme that concealed losses of hundreds of millions of dollars from investors.

Morgan Stanley is reportedly in negotiations to settle a prolonged U.S. investigation into its handling of private stock sales. The bank may pay between $500 million and $1 billion to resolve the matter, according to sources familiar with the situation. As part of the potential settlement with the Department of Justice and the U.S. Securities and Exchange Commission (SEC), the bank may agree to strengthen its internal controls. However, it is unlikely to plead guilty to any crime, and individuals are not expected to face criminal charges.