Compliance & Ethics

The Federal Deposit Insurance Corp. (FDIC) has publicly admitted to shortcomings in its oversight of First Republic Bank, the regional lender that collapsed and was subsequently acquired by JPMorgan Chase in May. In a comprehensive 62-page review, the regulator conceded that its supervisors could have taken more proactive measures to address factors that left First Republic vulnerable to severe contagion effects, such as its high level of uninsured deposits and exposure to rising interest rates.

The United Kingdom's financial regulator has issued a stern warning to the country's largest banks, urging them not to compromise their risk controls in the face of challenging economic conditions and other external pressures. The Financial Conduct Authority (FCA) has declared its intention to intensify oversight efforts in response to potential risks that could emerge if banks prioritize short-term revenue over regulatory obligations.

Switzerland has unveiled unprecedented insights into its inquiry process concerning the downfall of Credit Suisse, shedding light on the highly secretive procedures that will examine the actions of state bodies dating back to 2015. Credit Suisse, once the nation's second-largest bank, endured a series of scandals and losses, culminating in its state-engineered takeover by UBS in March.

In recent years, the astonishing capabilities of artificial intelligence have catapulted us into a realm once thought to exist only in the world of science fiction. With the current state of generative AI and the relentless progress in this field, the commercial applications of AI have become a focal point for organizations and businesses across the spectrum.

The U.S. District Court for the Western District of Texas has entered a consent order against Mirror Trading International Proprietary Limited (MTI), a South African company currently in liquidation. The court found MTI liable for multiple violations, including fraud in connection with retail foreign currency (forex) transactions, fraud as a commodity pool operator (CPO), registration violations, and failure to comply with CPO regulations. This ruling comes as a result of a complaint filed by the Commodity Futures Trading Commission (CFTC) on June 30, 2022.

The U.S. Securities and Exchange Commission (SEC) has announced that it has settled charges against Monolith Resources LLC, a privately held energy and technology company based in Lincoln, Nebraska. Monolith has been charged with employing employee separation agreements that violated the SEC's whistleblower protection rules.

The Financial Industry Regulatory Authority (FINRA) has initiated disciplinary action against Network 1 Financial Securities Inc. (Network 1) and one of its registered representatives, Molinaro, for their alleged failure to establish and enforce a supervisory system and written supervisory procedures (WSPs) designed to ensure compliance with the suitability requirements related to excessive trading.