Compliance & Ethics

Global securities regulators are taking their first steps toward establishing a framework to hold participants in the world of "decentralized finance" (DeFi) accountable for their actions, with the aim of safeguarding market stability. DeFi platforms have gained prominence for enabling users to lend, borrow, and save in digital assets while leveraging blockchain technology to bypass traditional financial intermediaries, such as banks and exchanges.

The U.S. Securities and Exchange Commission (SEC) has announced that Fluor Corporation, headquartered in Irving, Texas, will pay a substantial settlement of $14.5 million to resolve charges stemming from alleged improper accounting practices related to two significant fixed-price construction projects. Additionally, five former and current officers and employees of Fluor have agreed to settle related charges for their roles in causing the company's accounting violations.

Australia's financial regulator, the Australian Securities and Investments Commission (ASIC), has announced its intention to take legal action against PayPal Australia Pty Ltd, alleging that the digital payments giant has included an unfair term in its standard contracts with small business customers. The contentious clause, according to ASIC, could potentially shield PayPal from accountability for errors in overcharging, imposing an unjust burden on its clientele.

The Securities and Exchange Commission (SEC) has announced charges against five investment advisers for their failure to comply with regulations related to the safeguarding of client assets. Additionally, three of the firms faced charges for not promptly updating SEC disclosures concerning audits of their private fund clients' financial statements. As part of settlements, all five advisory firms have agreed to pay a combined total of over $500,000 in penalties.

The Securities and Exchange Commission (SEC) has taken action against Prime Group Holdings LLC, a private equity firm specializing in alternative real estate asset classes, for its failure to adequately disclose millions of dollars in real estate brokerage fees paid to a brokerage firm owned by its CEO. Prime Group has agreed to resolve the charges by paying a substantial penalty totaling $20.5 million.

The Financial Conduct Authority (FCA) has embarked on a comprehensive review of the treatment of domestic Politically Exposed Persons (PEPs) by financial services firms in the UK. This initiative aims to assess and enhance the handling of PEPs, who play a critical role in public service, by financial institutions.

The Swiss Financial Market Supervisory Authority (FINMA) has taken a significant step in bolstering anti-money laundering (AML) measures by publishing comprehensive guidance on money laundering risk analysis. This move aims to enhance transparency regarding the regulator's observations and insights gained from supervisory practices in this critical area of financial regulation.