703 - Compliance Land Mines in the Financial

Transcript:703 - Compliance Land Mines in the Financial:
703 - Compliance Land Mines in the Financial Industry Presented jointly by Berkeley Research Group and the ACC Financial Services Committee David Abshier Managing Director Berkeley Research Group Miriam Lefkowitz Chief Legal Officer Summit Financial Resources, Inc./ Summit Equities, Inc. Play to Win Code: MYMSURVIVOR Emre Carr Director Berkeley Research Group 2016 ACC Mid-Year Meeting Session 703 – Compliance Landmines in the Financial Industry April 12, 2016 2:40 p.m. – 3:55 p.m. Moderator Emre Carr, Director Managing Director, Berkeley Research Group (BRG) Panelists: David E. Abshier, Managing Director, Berkeley Research Group (BRG) Jonathan Halpern, Partner, Foley & Lardner, LLP Miriam Lefkowitz, Chief Legal Officer, Summit Financial Resources, Inc./Summit Equities, Inc. 2 Bank Supervision vs GAAP/SEC BSA/AML – Critical Developments FCPA Onboarding/Employment Ban the Box HIPAA Unfair, Deceptive or Abusive Acts or Practices Challenges for Dually Registered BDs/IAs Privacy/Security/Books and Records/Cybersecurity JOBS Act Issues Relating to Seniors Overseas Issues in General DOJ Enforcement Priorities 4 3 Reserves/Allowance for Loan and Lease Losses Off-Balance Sheet exposures Supervision Expansion CFPB Bleeding Down of “Best Practices” (Institutions below key thresholds) Enforcement Actions Public/Private Entities Bank Supervision vs GAAP/SEC 5 4 NYDFS Capable Systems/Data Validations Know Your Customer/Source of Funds Geographic Targeting Orders (FinCEN GTOs) Officer/Bank Liability BSA/AML – Critical Developments 6 5 Correspondent Relationships De-risk Communicate, Communicate, Communicate – BSA/Operations/ Credit/Board Independent Testing – review of top 20-50 Credit/Deposit Customers/Vendors BSA/AML – Critical Developments (Continued) 7 6 Aggressive Expansion of Foreign Corrupt Practices Act (FCPA) Enforcement FCPA Criminal and Civil Liability DOJ and SEC (issuer) jurisdiction Expansive extensive of U.S. territorial jurisdiction Provisions: Anti-bribery Books and records Accounting controls Liability for Third-Party Conduct Narrow exceptions Stringent criminal, civil, and administrative penalties 8 7 DOJ FCPA Enforcement Focus on Individual Prosecution for Perceived Corporate Misconduct FCPA Pilot Program (April 5, 2016) Super “Mitigation Credit” Offered -- Companies encouraged “to disclose FCPA misconduct to permit the prosecution of individuals whose criminal wrongdoing might otherwise never be uncovered or disclosed to law enforcement” Voluntary self-disclosure Full cooperation, including Disclose relevant facts attribute misconduct to specific sources, subject to privilege Cooperate proactively Identify involved third-party companies and individuals Timely and Appropriate Remediation Limited and Full Credit Options 9 8 Onboarding/Employment The Form U4 is a required documents for brokers, but seeks information (criminal histories, age) which raise HR issues. 1099 vs. W2 representatives for brokers and advisers creates HR concerns Non-solicit/non completes may violate FINRA Rule 2140 which