As multiple federal agencies announce moves to pull back on certain enforcement activities, some states have indicated they are ramping up efforts to fill the void. Find out about some of these recent developments in this roundup:
SEC withdraws digital asset custody statement for broker-dealers
The Securities and Exchange Commission (SEC) announced two of its divisions have withdrawn from a July 2019 joint staff statement regarding broker-dealer custody of digital asset securities. The staff withdrawing from the statement belong to the SEC’s Division of Trading and Markets and the SEC’s Office of General Counsel of the Financial Industry Regulatory Authority, Inc. (FINRA). The statement was issued in response to concerns raised by market participants regarding the application of federal securities laws and FINRA regulations to the potential intermediation, including custody, of digital asset securities and transactions. Specifically, the statement noted, “the ability of a broker-dealer to comply with aspects of the Customer Protection Rule is greatly facilitated by established laws and practices regarding the loss or theft of a security, that may not be available or effective in the case of certain digital assets.” Read the full joint statement here.
Pennsylvania steps up consumer protection efforts
The state of Pennsylvania is among a handful of states to step up consumer protection activities as the federal government steps back. The state unveiled new consumer protection tools for consumers to use to report scams and predatory practices, according to an announcement by Gov. Josh Shapiro. Shapiro’s office has provided a phone number, webpage and email address state residents can use to resolve issues and get help with a variety of financial, insurance and consumer concerns. “Pennsylvania has some of the strongest consumer protection laws in the country, and whether you’re dealing with a denied health insurance claim or problems with a bank or mortgage lender or have a dispute involving a student loan or grant, Gov. Shapiro and his administration are standing up for consumers,” the office said in a press release. Read more here.
OCC cites former Wells Fargo execs in enforcement actions
The Office of the Comptroller of the Currency (OCC) released information about five enforcement actions. Two of the actions described financial institutions found to have engaged in unsafe and unsound practices – Eastern National Bank of Miami, Fla. and EH National Bank of Beverly Hills, Calif. The other three described misconduct by former bank executives, including two auditors for Wells Fargo and a former CEO and board chair for Grand Bank for Savings in Mississippi. Learn more here.
DOJ to focus only on ‘most egregious’ white collar crimes
The U.S. Department of Justice (DOJ) released a memorandum revising its approach to “white collar” crime enforcement policies. The DOJ’s Criminal Division, Corporate Whistleblower Pilot Program and Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP) will now focus the agency’s resources on only the “most egregious” white collar crimes. Matthew Galeotti, the head of the DOJ’s Criminal Division, described these as crimes that harm U.S. taxpayers and markets, threaten American competitiveness, and endanger U.S. national security.