Sixteen Firms to Pay More Than $81 Million Combined to Settle Charges for Widespread Recordkeeping Failures
The SEC charged 16 firms for failing to preserve electronic communications, violating recordkeeping laws. They admitted wrongdoing, agreed to pay over $81 million in penalties, and vowed to enhance compliance. Off-channel communications, like personal texts, were widespread, breaching securities laws, with inadequate supervision. In addition to fines, they must cease violations, hire independent consultants for compliance reviews, and were censured by the SEC. Read more here.
Crypto Firm Bakkt Warns It Might Not Be Able to Remain in Business
Bakkt, launched in 2018 by the NYSE owner, faces financial uncertainty per an SEC filing due to insufficient funds. Seeking to sell up to $150 million in securities, it pivoted from facilitating bitcoin payments to focusing on crypto custody and trading after discontinuing its digital wallet in 2021. Despite efforts to promote bitcoin payments, success has been limited, though initiatives like the Lightning Network aim to enhance transaction efficiency. Learn more here.
Florida Legislature Moves to Regulate State’s Use of Digital Currency
SB 914, proposed by Sen. Perry, seeks to regulate digital trust businesses dealing in virtual currencies like Bitcoin in Florida. Banks must provide employee and financial information for approval. Gov. DeSantis previously blocked banks from using a federally adopted central bank digital currency (CBDC) due to oversight concerns. As of now, SB 914 lacks a House companion bill and awaits Committee review. Learn more here.
Identity Theft Week – Preventing Unauthorized Account Takeovers
Identity Theft Awareness Week, sponsored by the FTC, highlights the prevalence of identity theft. Financial institutions must implement prevention programs and reimburse unauthorized payments. Account Takeover is a significant concern, where bad actors gain unauthorized access to victim accounts. Call centers must enforce strict procedures to prevent providing sensitive information without proper verification, reducing the risk of Account Takeover. Read more here.
