Fairwords Weekly: Compliance Lessons and Tips, and more SEC Scrutiny
October 20, 2022
“A lot of times when there is a compliance failure, folks narrow in on the very specific thing in front of them instead of thinking more broadly about what the more systemic issue might be.”
— Veronica Martinez, Law Professor Specializing in Professional and Organizational Ethics, Duke University
This week, we explore several key lessons learned from Commodity Futures Trading Commission (CFTC) orders and Securities and Exchange Commission (SEC) enforcement on recordkeeping and supervision violations. In addition, we learn about how the SEC is expanding WhatsApp scrutiny to money manager communications following the recent enforcement action against several banks for violations. Finally, we consider how to appropriately police smartphone business use and the risks of failing to do so.
The CFTC recently issued orders, filing and settling charges against various affiliates of financial institutions for failing to maintain, preserve, or produce records that were required to be kept under the CFTC’s recordkeeping requirements and failing to diligently supervise matters related to their businesses. FERC also has record retention requirements, which enable it to monitor and enforce its rules and regulations and enhance market transparency. Failure to maintain compliance with recordkeeping requirements may create exposure for a company on several fronts, depending on the scope of its business activities. Learn several essential FERC compliance-related takeaways from the CFTC orders.