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Monthly Regulatory Summary (April 2024)

Monthly Regulatory Summary (April 2024)

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May 8, 2024

As the regulatory landscape is constantly evolving, Compliance Risk Concepts (“CRC”) is issuing its monthly review and summary of various FINRA, SEC, NFA, and FinCEN publications to assist our clients in keeping abreast of notable regulatory developments and deadlines in an effort to strengthen their compliance and regulatory initiatives.


Regulatory Notices

There were no Regulatory Notices in April.


Final Rules

There were no final rules in April.

Proposed Rules

There were no proposed rules in April.

Interim Final Rules

There were no interim final rules in April.

Interpretive Releases

There were no interpretive releases in April.

Policy Statements

There were no policy statements in April.


Notices to Members

Notice I-24-08

April 1, 2024

Effective date for amendments to NFA's Code of Arbitration and Member Arbitration Rules

NFA recently amended the Code of Arbitration and Member Arbitration Rules to ensure NFA is able to continue offering a high-quality arbitration program. Among other things, the amendments increase the arbitrator honorariums paid to the chair of an arbitration panel or the sole arbitrator in a proceeding and reallocate how hearing fees are assessed among the parties for claims initiated by a customer. The Board also approved several other minor technical amendments to the Code and Rules, including:

  • Increasing postponement fees for scheduled oral hearings;
  • Allowing a panel or sole arbitrator to order that a hearing take place virtually;
  • Consolidating lower claim amount tiers; and
  • Eliminating the motion fee waiver provision.

The amendments, which were based on feedback from NFA arbitrators, were unanimously approved by the Board at its February 15, 2024, meeting.

These amendments become effective for any arbitration claim filed on or after May 1, 2024, except that the amendment regarding virtual hearings is effective immediately.

NFA's March 11, 2024, rule submission letter to the CFTC contains more detailed information regarding the amendments.

Notice I-24-09

April 30, 2024

Request for Public Representative Nominations for NFA's Board of Directors

At NFA's Board of Directors' (Board) regular Annual Meeting on February 20, 2025, the terms of three of NFA's current Public Representatives – Michael C. Dawley, Ronald S. Oppenheimer and Todd E. Petzel – will expire. NFA's Articles of Incorporation require NFA to seek nominations of individuals to be considered to serve on the Board in the Public Representative Category, which may be made by both NFA Members and non-Members. The three Public Representatives whose terms are expiring are eligible for nomination.

In considering individuals to nominate as a Public Representative, please keep in mind that NFA's Board has consistently included Public Representatives with outstanding credentials, and their contributions to NFA have been enormous. Public Representatives bring the perspective of non-Members to the Board. Public Representative candidates must be knowledgeable of the markets and the Members regulated by NFA and have no material relationship with NFA that would impact their ability to provide an impartial, objective analysis of the issues that come before the Board. NFA Bylaw 517 sets forth the qualifications for Public Representatives as follows:

To qualify as a Public Representative of NFA, an individual must first be found by the Board, on the record, to have no material relationship with NFA that might reasonably affect the independent judgment or decision-making of the public representative. Any of the following relationships during the previous three years shall be considered a material relationship with NFA:

(a) The Director or member of the Director's immediate family (i.e., spouse, parents, children and siblings) is an NFA Officer or employee;

(b) The Director is an NFA Member, Associate Member or a principal of an NFA Member or has an immediate family member (i.e., spouse, parents, children and siblings) who is an NFA Member, Associate Member or principal of an NFA Member;

(c) The Director, or a member of the Director's immediate family, or a firm with which the Director or a member of the Director's immediate family, is an officer, director or partner receives more than $100,000 in combined annual payments from NFA for legal, accounting or consulting services. Compensation for services as a Director of NFA does not count towards the annual $100,000 payment limit, nor does deferred compensation for services prior to becoming a Director so long as compensation is in no way contingent, conditioned or revocable.

(d) The Director, or a firm with which the Director is an officer, director or partner receives more than $100,000 annually from an NFA Member or Associate Member for legal, accounting or consulting services related to the NFA Member's or Associate Member's CFTC registered activities.

Nominations must be submitted by email to by June 7, 2024. Upon receipt of any nominations(s), NFA staff will provide any non-incumbent nominee(s) who express an interest in serving NFA's Public Representative Application. A nominee(s) will have until June 14, 2024 to complete and submit this Application. As it reviews the completed Application(s) and evaluates nominee(s), NFA's Nominating and Governance Committee may also request prior to September 2024 interviews with interested nominees.

NFA News Releases

April 11, 2024

NFA orders Princeton, N.J. commodity pool operator Investments LLC not to reapply for NFA membership

April 11, Chicago—NFA has ordered Investments LLC ( Investments), a former NFA Member commodity pool operator and forex firm located in Princeton, N.J., not to reapply for membership or act as a principal of an NFA Member at any time in the future.

The Decision, issued by NFA's Business Conduct Committee (BCC), is based on a Complaint issued by the BCC and a settlement offer submitted by Investments. In its Complaint, the BCC alleged that Investments used misleading promotional material and communications and failed to uphold high standards of commercial honor and just and equitable principles of trade in connection with a commodity pool that the firm operated. The Complaint also alleged that Investments failed to supervise the firm's operations and its employee.

The complete text of the Complaint and Decision can be viewed on NFA's website.


FinCEN News Releases

April 15, 2024

WASHINGTON—Today, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), in close coordination with the Department of State’s Diplomatic Security Service (DSS), issued a Notice to financial institutions on fraud schemes related to the use of counterfeit U.S. passport cards. The Notice provides an overview of typologies associated with U.S. passport card fraud, highlights select red flags to assist financial institutions in identifying and reporting suspicious activity, and reminds financial institutions of their reporting requirements under the Bank Secrecy Act (BSA).

“FinCEN appreciates our partnership with DSS to highlight what is a concerning increase in the use of U.S. passport cards by illicit actors to impersonate and defraud individuals at financial institutions across the country,” said FinCEN Director Andrea Gacki. “We are issuing this Notice to help financial institutions and their customers from becoming victims to this crime, and to remind them to remain vigilant in identifying and reporting related suspicious activity.”

“The Diplomatic Security Service remains committed to protecting the American people and financial institutions from those seeking to perpetrate financial crimes by exploiting Department of State-issued identification documents,” said DSS Deputy Assistant Director for the Office of Investigations Greg Batman. “We hope this Notice will help financial institutions recognize fraudulent passport cards and their unlawful use.”

From 2018 to 2023, U.S. passport card fraud has resulted in $10 million in actual losses and $8 million in additional attempted losses with over 4,000 victims in the United States. However, DSS and other law enforcement agencies assess losses associated with U.S. passport card fraud and associated identity theft are likely significantly greater and seek increased reporting by financial institutions to identify additional illicit activity. Fraud, including financial crimes related to the use of counterfeit U.S. passport cards, is the largest source of illicit proceeds in the United States and represents one of the most significant money laundering threats to the United States, as highlighted in the U.S. Department of the Treasury’s National Money Laundering Risk Assessment, the National Strategy for Combatting Terrorist and Other Illicit Financing, and FinCEN’s Anti-Money Laundering and Countering the Financing of Terrorism National Priorities.

The full Notice is available online at FIN-2024-NTC1.

April 18, 2024

Financial Institutions Report $27 Billion in Elder Financial Exploitation Suspicious Activity in One-Year Period

WASHINGTON—The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a Financial Trend Analysis today focusing on patterns and trends identified in Bank Secrecy Act (BSA) data linked to Elder Financial Exploitation (EFE), or the illegal or improper use of an older adult’s funds, property, or assets. FinCEN examined BSA reports filed between June 15, 2022 and June 15, 2023 that either used the key term referenced in FinCEN’s June 2022 EFE Advisory or checked “Elder Financial Exploitation” as a suspicious activity type. This amounted to 155,415 filings over this period indicating roughly $27 billion in EFE-related suspicious activity.

“FinCEN has long recognized the threat that Elder Financial Exploitation poses and the need to protect the older adult population from financial abuse,” said FinCEN Director Andrea Gacki. “FinCEN’s analysis highlights the critical role of financial institutions in helping to identify, prevent, and report suspected Elder Financial Exploitation. We are grateful for their vigilance and for the BSA information they have filed—and continue to file—in response to FinCEN’s 2022 advisory.”

Financial institutions began filing BSA reports featuring the advisory’s key term on the same day that FinCEN published its 2022 advisory. FinCEN has continued to receive EFE BSA reports, averaging 15,993 per month between June 15, 2023 and January 15, 2024. Banks have submitted the vast majority of EFE-related BSA filings.

EFE typically consists of two subcategories: elder scams and elder theft. Elder scams, identified in approximately 80% of the EFE BSA reports that FinCEN analyzed, involve the transfer of money to a stranger or imposter for a promised benefit that the older adult does not receive. In elder theft, identified in approximately 20% of the reports, an otherwise trusted person steals an older adult’s assets, funds, or income. Among other conclusions, FinCEN’s analysis revealed that most elder scam-related BSA filings referenced “account takeover” by a perpetrator unknown to the victim; that adult children were the most frequent elder theft-related perpetrators; and that illicit actors mostly relied on unsophisticated means to steal funds that minimize direct contact with financial institution employees.

EFE-related losses affect personal savings, checking accounts, retirement savings, and investments, and can severely impact victims’ well-being and financial security as they age. In addition to filing a Suspicious Activity Report, FinCEN recommends that financial institutions refer customers who may be victims of EFE to the Department of Justice’s National Elder Fraud Hotline at 833-FRAUD-11 or 833-372-8311 for assistance with reporting suspected fraud to the appropriate government agencies. Additionally, FinCEN recommends EFE victims file incident reports to the FBI’s Internet Crime Complaint Center (IC3) and the Federal Trade Commission. For educational resources on EFE and scams targeting older adults, please see the Consumer Financial Protection Bureau’s Office for Older Americans and the Department of Justice’s resources provided as part of World Elder Abuse Awareness Day, which is June 15.

April 22, 2024

WASHINGTON—As the nation reflects on the many ways to protect our environment this Earth Day, the Financial Crimes Enforcement Network (FinCEN) reminds financial institutions to remain vigilant in identifying and reporting suspicious activity related to environmental crimes. Environmental crimes frequently involve transnational criminal activity related to several of FinCEN’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) National Priorities, including corruption, fraud, human trafficking, and drug trafficking.

FinCEN has previously published resources to help stakeholders identify and combat environmental crimes and associated illicit financial activity. FinCEN’s December 2021 Financial Threat Analysis contains information on wildlife trafficking threat patterns and trend information identified in Bank Secrecy Act (BSA) data. FinCEN’s Notice FIN-2021-NTC4 provides financial institutions with specific Suspicious Activity Report (SAR) filing instructions and highlights illicit financial activity related to several types of environmental crimes such as wildlife trafficking and illegal logging, fishing, or mining. SAR filings, along with effective implementation of BSA compliance requirements, are crucial to identifying and stopping environmental crimes and related money laundering.

FinCEN Resources on Environmental Crimes

Hot Issue

April saw yet another financial firm (this time a registered investment adviser) settle charges with the SEC, which included widespread and longstanding failures to maintain and preserve certain electronic communications. According to the SEC, the RIA’s employees at various levels of authority communicated about company business internally and externally using personal texting platforms and other off-channel messaging applications in violation of the RIA’s policies and procedures. Despite having policies and procedures in place regarding retention of business-related records, the SEC found that the RIA failed to implement procedures to monitor whether its employees were following the firm’s policies concerning work-related communications. The SEC also cited a failure to access employees’ personal devices to determine whether they were complying with the firm’s communications policies.

The settlement resulted in a $6.5 million penalty and required the RIA to implement improvements to its compliance policies and procedures.

This latest iteration should reinforce that the issue of off-channel communications is not going away. Furthermore, firms should also take note that the practice of relying on attestations alone is unlikely to meet muster under SEC scrutiny.

Our Perspective

Regulators continue to demonstrate their commitment to protecting investors by aggressively pursuing bad actors and reviewing and updating regulations to guard investors against constantly evolving threats.

The best approach to regulatory compliance is a proactive one. Staying ahead of the curve by taking note of statements and guidance released by regulators and using them as a barometer to assess the current regulatory climate can help ensure that a firm is prepared for a regulatory exam. Rather than scrambling to rectify issues or meet deadlines, a thorough, active compliance program that considers and incorporates regulatory developments is in a better position to satisfy regulators and preserve operations so they can best serve their clients.

For more information, please contact:

Mitch Avnet

p. (646) 346-2468

David Amster

p. (917) 568-6470


  • SEC Press Release 2024-44
  • NFA Notices
  • FinCEN News Releases



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