Regulatory Roundup for December 2024
Welcome to our December 2024 Regulatory Roundup, where we provide practical advice on the latest regulatory headlines. We start this issue with the SEC’s 2024 enforcement results, which fell somewhat short after its 2023 banner year. We also say goodbye to SEC Chair Gary Gensler, who tendered his resignation after Donald J. Trump won his presidential bid. Given the president-elect’s views on government, I expect the next chair to have a less aggressive regulatory agenda. For firms following the ongoing drama in the Fifth Circuit Court of Appeals about the Corporate Transparency Act, the current answer as of December 26 is that the requirements to report Beneficial Ownership are stayed. But stay tuned since that answer may change once again. Finally, I included a few enforcement cases, one on the misappropriation of client funds and two on cherry-picking. I want to highlight that in two cases, the firm was sanctioned for failure to discover and detect the nefarious activity. In the third (the cherry-picking complaint), the individual responsible, not the firm, was charged. This appears to be due, at least in part, to the efforts of the Chief Compliance Officer. The SEC highlighted the CCO’s training and messaging that emphasized the need to follow the firm’s aggregation and allocation procedures. Compliance officers should take notice.
