Photo of Christopher Bosch

Christopher Bosch is an associate in the Government Contracts, Investigations & International Trade Practice Group in the firm's New York office.

Earlier this month, the Securities and Exchange Commission (“SEC”) took a break from its recent focus on digital assets and the Best Interest fiduciary standard to publish a Risk Alert encouraging investment advisers and broker-dealers to revisit their policies and procedures relating to Regulation S-P (“Reg S-P”) (17 C.F.R. Part 248, Subpart A), which sets out requirements designed to protect customer information and records. The Alert highlights several key compliance issues identified by the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) during exams completed in the past two years.
Continue Reading SEC Issues Risk Alert on Customer Privacy Safeguards

Over the past couple of years, the crypto industry has come under heavy scrutiny from skeptical regulators seeking to root out fraud and protect investors amid the initial coin offering boom that generated over $4 billion in 2017. However, this skepticism is starting to give way to a more business-friendly attitude.

Crypto firms have made notable headway with regulators in recent months, securing authorizations to act as custodians of digital assets and working towards approval of the first bitcoin-based exchange traded fund (“ETF”). These developments may reflect an evolving collaborative environment that bodes well for the future of blockchain-based innovations.
Continue Reading Crypto Firms Make Inroads with State and Federal Regulators

On April 17, 2018, the New York State Attorney General (“NYAG”) sent a “Virtual Markets Integrity Initiative Questionnaire” to 13 companies operating virtual currency trading platforms. The questionnaire consists of 34 questions covering a number of topics, including ownership and control, operation and fees, trading policies and procedures, outages and other suspensions of trading, internal controls, and privacy and money laundering.  
Continue Reading New York’s AG Enters the Cryptocurrency Ring as Federal, State Authorities Find Regulatory Footing

There is universal acknowledgement that anti-money laundering (“AML”) monitoring has become progressively costlier (both in terms of time and money) since the Bank Secrecy Act (“BSA”) was passed nearly five decades ago, and that compliance has become increasingly burdensome, especially for smaller regional and community institutions. According to the Financial Crimes Enforcement Network (“FinCEN”), nearly one million suspicious activity reports (“SAR”) were filed in 2016 (up from 669,000 in 2013). According to a 2016 report by the Heritage Foundation, the cost of compliance with current AML rules could be as much as $8 billion a year. Notwithstanding the tremendous resources spent on AML compliance, money laundering is still rampant. The U.N. has estimated that the amount of money laundered every year is between $800 billion and $2 trillion dollars. However, according to a 2011 report issued by the U.N. Office on Drugs and Crime, less than one percent of this amount is seized by law enforcement.
Continue Reading New Legislation Introduced in 2017 Signals the Beginning of a Strong Push for AML Reform

Blockchain technology (“Blockchain”), also known as Distributed Ledger Technology, stands poised to transform the future of the financial industry. Generally speaking, Blockchain enables the creation of a continuously growing ledger of transactions that is resistant to alteration and ensures the integrity of new transactions through a system of checks-and-balances built into the system’s code. The combination of its speed, versatility, and built-in security features lend the technology well to applications in the financial industry. In a timely effort, the Financial Industry Regulatory Authority (“FINRA”) recently gathered top U.S. financial regulators and industry stakeholders to participate in its 2017 Blockchain Symposium. In a series of engaging discussions, panelists hashed out the potential benefits and pitfalls of the dynamic technology.
Continue Reading FINRA Fetes Emerging Blockchain Technology at Industry Conference

On April 10, 2017, Neil Gorsuch was sworn in as the Supreme Court’s 113th justice. While his experience on the Tenth Circuit Court of Appeals with cases involving financial regulation may be limited, certain of his decisions reflect an identifiable hostility towards executive agencies that, in his view, act in excess of the powers accorded them by statutory and constitutional law. These decisions suggest that the High Court’s newest justice will keep a close eye on how financial regulators go about their business.
Continue Reading Financial Regulators Take Note: The Supreme Court’s Newest Member is a Tough Taskmaster

In late December, New York State’s Department of Financial Services (“DFS”) released its revised proposed cybersecurity regulation (the “DFS Rule”).  While the revisions pare back some of the DFS Rule’s original requirements and add some much needed flexibility, the regulation will still impose many new obligations upon a wide array of financial institutions doing business in New York.  The DFS Rule will become effective on March 1, 2017.
Continue Reading New York State Department of Financial Services Cybersecurity Regulation Poised to Reshape Existing Regulatory Landscape

If the New York State Department of Financial Services (“DFS”) has its way, come January 1, 2017, financial services companies that require a form of authorization to operate under the banking, insurance, or financial services laws (“Covered Entities”) will be required to comply with a new set of comprehensive cybersecurity regulations aimed at safeguarding information systems and nonpublic information.
Continue Reading New York State Department of Financial Services Proposes Cybersecurity Regulations for Financial Services Companies

The Securities and Exchange Commission’s (“SEC”) recent $1 million settlement with Morgan Stanley Smith Barney LLC (“MSSB”) marked a turning point in the agency’s focus on cybersecurity issues, an area that the agency has proclaimed a top enforcement priority in recent years.  The MSSB settlement addressed various cybersecurity deficiencies that led to the misappropriation of sensitive data for approximately 730,000 customer accounts.
Continue Reading SEC Steps Up Cybersecurity Enforcement with $1 Million Fine Against Morgan Stanley

Everything old is new again.  On January 1, 2016, the New York Stock Exchange (“NYSE”) – now owned by Intercontinental Exchange, Inc. – will be taking back some of the regulatory responsibilities it yielded to the Financial Industry Regulatory Authority (“FINRA”), starting in 2007 when the NYSE and National Association of Securities Dealers (“NASD”) merged their self-regulatory functions.  The goal then was to address inefficiencies and overlap that often resulted from the concurrent oversight by these two self-regulatory organizations (“SROs”).
Continue Reading Forward to the Past: NYSE Returns to Regulation