All articles by Joe Mont – Page 68
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CFPB’s ‘UDAAP’ Approach Is an Ambiguous Compliance Concern
Image: “Unfair and deceptive practices” have long been an enforcement area for consumer protection. Now the Consumer Financial Protection Bureau is adding an A for “abusive”—and taking away clarity for financial firms about what its UDAAP standard exactly means. “There is no list of clear black-and-white rules, and that’s what ...
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How to Simplify Cyber-Security Controls Amid Abundant Laws
By now every compliance officer has already heard the warning that it’s a matter of when you suffer a cyber-security breach, not if. Then comes compliance with breach disclosure rules—and those demands are becoming as perplexing as the cyber-threat itself. Overwhelmed, compliance officers are seeking ways to navigate these demands ...
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Blog
Appeals Court Opinion Sheds Light on Excluding Proxy Proposals
A newly released opinion from a federal appeals court sheds light on why Walmart was allowed to reject a shareholder proposal calling for a board review of its policies regarding the sale of high-capacity firearms. The opinion could provide a blueprint for future courts weighing in on the SEC’s traditional ...
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Blog
Another Push Afoot to Resurrect Glass-Steagall Act,
Image: Sen. Elizabeth Warren (D-Mass.) has once again teamed up with Sen. John McCain (R-Ariz.) and Angus King (I-Maine) to file legislation to restore and modernize the Glass-Steagall Act, separating traditional banks that hold federally insured savings accounts from financial institutions that offer higher-risk services. Details inside.
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Blog
IMF: U.S. Must Tackle Shell Companies, Beneficial Ownership
A new report from the IMF faults the United States for turning a blind eye to shell companies and unclear beneficial ownership—that is, the parties that really control a company or its related bank accounts, even if they do so behind the scenes. That loose approach, the report says, “creates ...
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U.S. Failures to Track Beneficial Owners Create AML Headaches Internationally
Image: Despite the forward march in Europe and elsewhere to fight money laundering, a problem remains: Here at the largest economy in the world, state incorporation laws in the United States create a massive loophole that bad actors can exploit. “It’s a huge problem not just for the United States ...
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Blog
IMF: Regulators Must Focus on Mutual Funds, Insurance Companies
The thesis of a new report from the International Monetary Fund is hardly shocking. Despite progress, the U.S. must finish the work begun on financial reforms, it concludes. More telling is an assessment of what new areas systemic risk has bubbled into and how regulators should respond. Greater attention ...
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All the Questions Confronting Clawback Policy
The SEC has proposed a new rule that publicly traded companies adopt a clawback policy to recoup incentive-based compensation from executives that later turns out to be based on faulty financial statements. How hard can that be? Well, pretty hard, many compensation experts say. Inside, we have the run-down on ...
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Blog
SEC Goes Beyond SOX with Clawback Proposal
The SEC has proposed another controversial executive compensation rule per the Dodd-Frank Act: a clawback requirement for erroneously awarded compensation, that applies to the CEO, CFO, and numerous other corporate executive officers. If adopted as proposed, the rule will go well beyond previous clawback requirements under Sarbanes-Oxley. More inside.
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Blog
Cyber-Security, AML Deficiencies Flagged in OCC Risk Review
As banks try to close the profitability gap created by a lingering low-interest rate environment and offer new services to customers, they face escalating compliance risks. Cyber-security and anti-money laundering controls are among the concerns flagged by the Office of the Comptroller of the Currency in its “Semiannual Risk Perspective.” ...
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Blog
MetLife Challenges FSOC Secrecy with Document Demand
As it sues the Financial Stability Oversight Council in federal court over its designation as a Systemically Important Financial Institution, MetLife is demanding that its lawyers have access to nearly 500 pages of redacted and unreleased agency documents, many of them otherwise shielded because of references to other companies. More ...
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Confounding Hints on CCO Success
Image: Everyone knows that independent chief compliance officers make for a better compliance program, right? Um, perhaps we need to think again: New data suggests that companies with compliance reporting into the general counsel tend to be more effective. The lesson may not be one of inherent superiority, says LRN’s ...
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Blog
Aguilar on CCO Liability Fears: Untwist Your Knickers!
Image: SEC Commissioner Luis Aguilar has jumped into the conversation about CCO liability, rebutting “unwarranted fear in the CCO community” that the SEC is looking to take enforcement action against compliance officers at investment advisory firms. “CCOs that faithfully and reasonably fulfill [SEC requirements] are not going to be subjects ...
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Article
Drug, Device Companies Face New FDA Electronic Submissions
The Food and Drug Administration is overhauling how it accepts submissions for a host of filing requirements imposed on drug and medical device makers. For many, this will be the first time the submissions have ever been filed electronically. While the move away from paper documents may ultimately be advantageous ...
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Blog
CFPB Makes Narratives in Complaint Database Public
The Consumer Financial Protection Bureau has made the consumer narratives collected by its controversial complaint database publicly available. In March, the CFPB formalized its policy for accepting and disclosing the complaint narratives. Last week, more than 7,700 of those complaints—lodged against banks, credit card companies, and other consumer-dealing financial ...
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Blog
SEC Will Consider Universal Proxy Ballot Rulemaking
Image: SEC Chair Mary Jo White said in a speech Thursday that the agency will, in time, propose rulemaking to allow universal proxy ballots—single proxy cards that list both management’s and opponents’ nominees in contested director elections. White says a date has not yet been set for the proposal. More ...
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Blog
New CD&Is Address Expansion of Regulation A
The Securities and Exchange Commission’s Division of Corporation Finance has issued 11 new Compliance and Disclosure Interpretations to offer guidance on Regulation A changes that went into effect on June 19. They address such matters as the use of social media for “testing the waters” communications, what a “principal place ...
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Article
Q&A: The Battle for Better Disclosure Data
Image: As part of our ongoing series of conversations with compliance and risk experts, we spoke with Hudson Hollister, founder and executive director, Data Transparency Coalition, a trade association pursuing the publication of government information as standardized, machine-readable data. Hollister talks about the SEC’s efforts to modernize its disclosure regime ...
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SEC Rule on Pay-for-Performance Triggers Criticism on TSR Metric
Image: The SEC’s proposed pay-for-performance rule would require companies to disclose the relationship between executive compensation and Total Shareholder Return. A simple and effective metric? Not everyone thinks so. “At first blush it’s intuitive: executives should win as shareholders win,” says Barry Sullivan of compensation consulting firm Semler Brossy. The ...
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Blog
SEC Commissioners Want New Rules for Transfer Agents
In an increasingly rare display of unity among members of the Securities and Exchange Commission, they say that the Commission needs to dust off decades-old rules for transfer agents. New requirements could include requiring agents to be appropriately insured, properly disclosing conflicts of interest; and being subjected to more robust ...