SEC lists regulatory priorities for 2017

SEC lists regulatory priorities for 2017
SEC lists regulatory priorities for 2017

The US regulator the Securities and Exchange Commission (SEC) has outlined its priority areas for compliance activity this year, which include electronic investment advice, money market funds, and financial exploitation of senior investors


Outgoing SEC chair Mary Jo White said: ‘These priorities make clear we are continuing to focus on a wide range of issues impacting our markets, from traditional areas such as market-wide risks to new forms of technology including automated investment advice.’

The 2017 examination priorities address issues across a variety of financial institutions, including investment advisers, investment companies, broker-dealers, transfer agents, clearing agencies, private fund advisers, national securities exchanges, and municipal advisors.

In its announcement, the SEC underlined that protecting retail investors also remains a priority in 2017 and it will be reviewing firms delivering investment advice through electronic mechanisms, sometimes referred to as ‘robo-advising’, as well as wrap fee programs in which investors are charged a single bundled fee for advisory and brokerage services.

New initiatives for 2017 include an evaluation of money market funds’ compliance with the SEC’s amended rules, including those on anti-money laundering controls, which became effective in October 2016, and an ongoing initiative to examine for cybersecurity compliance procedures and controls.

The SEC continues to make substantial payouts under its whistleblower programme set up in 2012 to reward individuals who provide information for its investigations that leads to a successful enforcement action. Payouts so far total over $140m and include a recent award of more than $20m in November.

Now Meissner & Associates, a New York firm that has secured the largest payment issued to any individual US whistleblower, has announced a partnership with UK employment law firm Brahams Dutt Badrick French (BDBF), and the German firm Naegele, designed to create a new transatlantic whistleblower initiative.

The three-way alliance is designed to help employees, suppliers and other stakeholders of international companies who identify financial misconduct in European operations bring lawsuits and advance enforcement actions by the SEC. Eligible clients could include anyone working with a European or multinational company whose securities trade on US exchanges as well as American companies that do business in Europe.

‘While the SEC’s bounty program has yielded a large harvest of payments in the US, most of those working for regulated companies in other countries have not taken advantage of the mechanism, even though most of the same rules apply for individuals working overseas, who have little or no protection for blowing the whistle,’ said attorney Stuart Meissner, a former securities regulator and prosecutor with the Manhattan District Attorney’s office and the New York Attorney General, who is helping lead the collaboration.

Meissner recently represented a former financial executive at multinational Monsanto, whose role in identifying audit lapses at the agribusiness giant led to a $22.5m award last August, which was by far the largest bounty paid to any US citizen to date.

Under the new alliance, the Naegle and BDBF firms will advise clients on local legal issues stemming from their role as whistleblowers, including helping with challenges that may arise from their employers such as retaliatory action. Meissner will help clients navigate the process of filing and pursuing cases with the SEC.

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