Policy Patty Toolkit 

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The Policy Patty Toolkit Blog covers emerging issues on governance, risk and compliance controls.

This Blog is made available by the Policy Patty Toolkit for informational purposes only to cover emerging legal, governance, regulatory and compliance matters and issues. The postings are not intended to provide specific professional advice (legal, tax, or accounting) to an identified problem or issue. By using this Blog, you understand and acknowledge that there is no attorney-client relationship formed between us and should not use this site as a substitute for legal advice from your legal counsel regarding a particular matter or advice from another professional.

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Proposed Rule Change to Amend FINRA Rule 6710 to Modify Agency Debt Security Dissemination Protocols

Posted on August 17, 2018 at 7:30 AM


FINRA filed a prpoposed rule change with the SEC to amend FINRA Rule 6710 to modify the dissemination protocols with respect to Agency Debt Securities.

FINRA requires members to report to the Trade Reporting and Compliance Engine (“TRACE”) transactions in TRACE-Eligible Securities,including securities that meet the definition of “Agency Debt Security.”FINRA disseminates transaction information on Agency Debt Securities and displays eit...

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Citigroup to Pay More Than $10 Million for Books and Records Violations and Inadequate Controls

Posted on August 16, 2018 at 6:40 PM
The SEC announced that Citigroup has agreed to pay $10.5 million in penalties to settle two enforcement actions involving its books and records, internal accounting controls, and trader supervision. The charges stem from $81 million of losses due to trader mismarking and unauthorized proprietary trading and $475 million of losses due to fraudulently-induced loans made by a Mexican subsidiary. In the first action, Citigroup Inc. and its U.S. broker-dealer subsidiary Citigroup Global Markets ... Read Full Post »

SEC Files Charges in Municipal Bond "Flipping" and Kickback Schemes

Posted on August 15, 2018 at 11:10 AM

The SEC charged two firms and 18 individuals in a scheme to improperly divert new issue municipal bonds to broker-dealers at the expense of retail investors.

According to the SEC’s complaint:

  • The defendants – known in the industry as “flippers” – purchased new issue municipal bonds, often by posing as retail investors to gain priority in bond allocations. The defendants then “flipped” the bonds to broker-dealers for a fee. 
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SEC Charges Ameriprise Financial Services for Failing to Safeguard Client Assets

Posted on August 15, 2018 at 11:00 AM

The SEC announced that Ameriprise Financial Services Inc. will pay $4.5 million to settle charges that it failed to safeguard retail investor assets from theft by its representatives.

According to the SEC’s order:

  • Five Ameriprise representatives committed numerous fraudulent acts, including forging client documents, and stole more than $1 million in retail client funds over a four-year period. 
  • Ameriprise, a registered investment adviser and broker-dealer, ...
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DOJ Enforcement Actions - Week of August 13th

Posted on August 14, 2018 at 12:35 AM
DOJ actions and enforcement matters for the week: Assistant Attorney General Benczkowski Announces Newark/Philadelphia Medicare Fraud Strike Force to Focus on Health Care Fraud and Illegal Opioid Prescriptions Monday, August 13, 2018 United States Reaches Settlement with Providence Schools to Ensure Equal Opportunities for English Learner Students Monday, August 13, 2018 Mississippi Return Preparer Pleads Guilty to Filing False Tax Returns Friday, August 10, 2018 Oregon Domestic Terror... Read Full Post »

NY DFS Reminder re Upcoming Cybersecurity Regulation Compliance Date

Posted on August 13, 2018 at 3:05 PM
NY Department of Financial Services Superintendent Maria T. Vullo reminded all Department of Financial Services (DFS) regulated entities covered by DFS's landmark cybersecurity regulation that the third transitional period of New York's first-in-the-nation cybersecurity regulation ends on September 4, 2018. Beginning on September 4, 2018, banks, insurance companies, and other financial services institutions regulated by DFS are required to have come into compliance with several additional pr... Read Full Post »

FINRA Issues Proposed Rule Change to Amend the Security Futures Risk Disclosure Statement

Posted on August 10, 2018 at 9:35 AM


Proposed Rule Change to Amend the Security Futures Risk Disclosure Statement

Financial Industry Regulatory Authority, Inc. (“FINRA”) files Rule Notice SR-FINRA-2018-028 with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend Section 6.1 (Protections for Securities Accounts) of the 2002 security futures risk disclosure statement (“2002 Statement” or “Statement...

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DOJ Enforcement Actions - Week of August 6th

Posted on August 10, 2018 at 7:30 AM

The Department of Justice (DOJ) enforcement actions for the week include:

Federal Court Shuts Down South Florida Tax Return Preparers and Enters Monetary Judgments in Favor of the United States

Thursday, August 9, 2018

Real Estate Investor Pleads Guilty to Bid Rigging at Online Auctions

Thursday, August 9, 2018

IRS Employee Pleads Guilty to Identity Theft

Thursday, August 9, 2018

Justice Department Announces $3.4 Billion in Grants to Aid Crime Vict...

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SEC Charges Cloud Communications Company and Two Senior Executives With Misleading Revenue Projections

Posted on August 7, 2018 at 4:50 PM

SEC Charges Cloud Communications Company and Two Senior Executives With Misleading Revenue Projections

The SEC charged a cloud communications company and two executives with providing misleading quarterly revenue estimates. The company and executives agreed to pay over $1.9 million in penalties to settle the SEC’s charges.

According to the SEC’s order,:

  • Sonus Networks Inc.’s former CFO, Mark Greenquist, was aware of red flags which undermined the comp...
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SEC Updates List of Firms Using Inaccurate Information to Solicit Investors

Posted on August 6, 2018 at 2:25 PM
The SEC announced that it has updated its list of unregistered firms that use misleading information to primarily solicit non-U.S. investors, adding 16 soliciting entities, four impersonators of genuine firms, and nine bogus regulators. The updates by the SEC Division of Enforcement's Office of Market Intelligence, in coordination with the SEC's Office of Investor Education and Advocacy and the Office of International Affairs, are part of the agency's continuing effort to protect retail inves... Read Full Post »