Insights & Regulatory Updates
Trump Reportedly Considers Crypto Advocate Paul Atkins for SEC Chair Role
On December 3, 2024, reports emerged that Donald Trump is reportedly considering crypto-friendly Paul Atkins to lead the Securities and Exchange Commission (SEC), though no official announcement has been made. If confirmed, this move could signal a potential seismic shift in the regulatory approach to cryptocurrency under a new administration. According to the cryptocurrency-focused outlet Unchained, three anonymous sources have confirmed that Trump has approached Atkins for the role, though a decision from Atkins has yet to be announced.
NAM Advocates for SEC Oversight of Proxy Advisory Firms
On December 3, 2024, the National Association of Manufacturers (NAM) filed a brief with the U.S. Court of Appeals for the D.C. Circuit, urging the court to overturn a lower court decision that challenges the Securities and Exchange Commission’s (SEC) authority to regulate proxy advisory firms. This development marks the latest chapter in NAM’s long-standing campaign to ensure proper oversight of these powerful entities.
JPMorgan Employee Challenges SEC Regulation of Outside Activities
On December 3, 2024, a federal lawsuit filed in the U.S. District Court for the District of Arizona challenges the authority of the Securities and Exchange Commission (SEC) to regulate outside business activities of employees through its oversight of Financial Industry Regulatory Authority (FINRA) rules. The case, Preston v. SEC, No. 2:24-cv-03396, raises significant constitutional and administrative law questions.
Navigating the SEC's FY 2024 Enforcement Landscape: Trends, Takeaways, and What Lies Ahead
The SEC’s Enforcement Division's 2024 annual report reveals a dramatic shift in its enforcement approach during the fiscal year (October 2023–September 2024), with a striking 26% decline in total enforcement actions compared to 2023. This marked a sharp departure from the post-pandemic trend of rising enforcement activity.
FINRA Likely to Amend Expulsion Practices in Wake of D.C. Circuit Ruling
The Financial Industry Regulatory Authority (FINRA), the financial industry’s self-regulator, faces a turning point following a recent ruling by the U.S. Court of Appeals for the D.C. Circuit. In Alpine Securities Corp. v. FINRA, the court held that FINRA’s expedited expulsion proceedings likely exceed its authority without prior oversight from the Securities and Exchange Commission (SEC). This decision has significant implications for FINRA’s enforcement practices and the broader broker-dealer landscape.
D.C. Circuit Issues Long-Awaited Decision in Alpine v. FINRA
On November 22, 2024, the D.C. Circuit issued a landmark decision in Alpine Securities Corporation v. FINRA, a case that examines the constitutional boundaries of the Financial Industry Regulatory Authority’s (FINRA) enforcement powers. The ruling enjoined FINRA from expelling Alpine Securities Corporation without prior SEC review, emphasizing the limitations of expedited enforcement proceedings under the nondelegation doctrine.
WisdomTree Files S-1 for Spot XRP ETF with SEC
New York-based asset manager WisdomTree has made waves in the digital asset space with the filing of a Form S-1 registration statement with the Securities and Exchange Commission (SEC) for a spot XRP exchange-traded fund (ETF). This development reflects the firm’s ongoing commitment to expanding its crypto-focused investment products amidst an evolving regulatory environment.
SEC Enforcement Trends in Fiscal 2024: Record Remedies Despite Decline in Actions
The U.S. Securities and Exchange Commission (SEC) recently released its enforcement report for fiscal 2024, detailing a year of record-breaking financial remedies amidst a significant decline in the total number of enforcement actions. While the total actions dropped by 26% compared to the previous fiscal year, the SEC obtained an unprecedented $8.2 billion in financial remedies—a testament to the agency’s focused efforts in high-stakes cases.
The SEC at a Crossroads: Gensler’s Exit, Trump’s Administration, and the Future of Regulation
The Securities and Exchange Commission (SEC) stands on the brink of significant change as current Chair Gary Gensler prepares to step down on January 20, 2025. This leadership transition coincides with President-elect Donald Trump’s inauguration and promises to reshape the regulatory landscape for years to come.
FINRA Dialing Back DEI and Racial Justice Initiatives Amid Conservative Pressure: A Call for Authentic, Impactful Change
The Financial Industry Regulatory Authority (FINRA) has made significant changes to its online content, quietly removing pages that promoted its diversity, equity, inclusion (DEI), and racial justice efforts. These revisions follow an increasing conservative backlash against DEI initiatives across multiple sectors.
Big Data Is Watching You: How the SEC Uses Advanced Analytics to Uncover Violations
The U.S. Securities and Exchange Commission (SEC) has long stood as the vanguard of financial market integrity, but in recent years, it has transformed into a sophisticated data-driven enforcement machine. By leveraging cutting-edge analytics, the SEC has fundamentally reshaped the landscape of securities regulation, ensuring that the most complex and well-disguised violations come to light. From insider trading and market manipulation to cherry-picking schemes and misconduct in the trading of structured products, the SEC's methods have become simultaneously more advanced and more efficient, making noncompliance an exceedingly risky gamble.
FINRA’s Proposed Changes to Rule 6500 Series Aim to Simplify SLATE Reporting
FINRA has issued a set of proposed amendments to Rule 6500 Series, which governs the Securities Lending and Transparency Engine (SLATE). These changes are designed to address feedback from market participants and to make the reporting process more manageable, while also expediting the implementation of the SLATE system.
How to Start a Hedge Fund: The Definitive Legal and Practical Guide
Establishing a hedge fund in the United States is a high-stakes, complex undertaking that requires not only a robust investment strategy but also a meticulous approach to legal and regulatory compliance. While the hedge fund world offers lucrative opportunities for those who succeed, it also comes with significant challenges. This handbook is designed to provide you with the most thorough, balanced, and actionable guide available on the internet, offering deep insights into each phase of the process. If you’re serious about starting a hedge fund, this is your essential roadmap.
Trump to Meet Privately With Coinbase CEO Brian Armstrong: What It Means for Crypto Regulation
President-elect Donald Trump is set to meet privately with Coinbase CEO Brian Armstrong on Monday, marking a significant moment for the cryptocurrency industry. According to sources familiar with the matter, the meeting is expected to focus on key personnel appointments for Trump’s second administration, potentially signaling a major shift in the regulatory landscape for digital assets.
SEC Charges BIT Mining with FCPA Violations in Connection with Bribery Scheme to Influence Members of Japanese Parliament
The Securities and Exchange Commission (SEC) has announced a significant enforcement action involving BIT Mining Ltd., formerly known as 500.com Limited, for violations of the Foreign Corrupt Practices Act (FCPA). The company has agreed to pay a $4 million civil penalty to resolve charges stemming from a bribery scheme that took place from 2017 to 2019. The scheme aimed to influence Japanese government officials, including members of Japan’s parliament, in an effort to establish an integrated resort and casino in the country.
Crypto Legislation Likely Coming Under Trump, Ex-SEC Chief Jay Clayton Predicts
As the United States braces for a shift in regulatory priorities, former SEC Chairman Jay Clayton announced on Wednesday that he anticipates significant legislative action on cryptocurrency under President-elect Donald Trump’s upcoming administration. Speaking at a gathering of securities lawyers in New York, Clayton hinted at a friendlier regulatory environment for the crypto industry, a stark contrast to the enforcement-heavy approach seen under President Joe Biden.
18 States Sue SEC and Gary Gensler for Alleged ‘Regulatory Overreach’ on Crypto
The Securities and Exchange Commission (SEC) and its Chair, Gary Gensler, are facing significant legal pushback from 18 Republican attorneys general, who have filed a lawsuit accusing the agency of overstepping its regulatory bounds in its enforcement actions against the cryptocurrency industry. The lawsuit, led by Kentucky Attorney General Russell Coleman, is a pivotal moment in the ongoing battle over the future of crypto regulation in the United States.
FBI Seizes Polymarket CEO’s Phone Following Trump Election Prediction
Federal authorities have raised eyebrows with a high-profile seizure of electronic devices from Polymarket CEO Shayne Coplan’s Soho residence. The early-morning raid occurred just a week after Polymarket, a decentralized prediction market platform, accurately forecast Donald Trump’s presidential election victory. This incident has sparked debate over the potential political motivations and broader regulatory implications for decentralized finance.
Gary Gensler Releases Statement Hinting at Resignation as SEC Chair
In a surprising turn of events, SEC Chair Gary Gensler has hinted at a potential resignation, marking a significant moment in the world of financial regulation. Speaking at the Practising Law Institute’s 56th Annual Institute on Securities Regulation, Gensler delivered a reflective address, acknowledging both the achievements and controversies of his tenure. His remarks have left industry insiders speculating about the future of the SEC, especially as the agency grapples with the rapidly evolving landscape of cryptocurrency and financial technology.
SEC Trends - November 2024
As the Securities and Exchange Commission (SEC) continues to evolve its examination and enforcement priorities, fund managers are increasingly in the spotlight. The SEC’s National Examination Program plays a critical role in promoting compliance, reducing fraud risk, and informing regulatory policy—all while serving as a key source of enforcement referrals. With these trends in mind, fund managers must be vigilant and prepared. Here’s what to watch for in 2024 and beyond.