Financial Firms' Top Compliance Concern: Off-Channel Communications

Off-Channel Communications Now Advisors’ Top Compliance Concern

Advisors’ No. 1 concern has shifted from complying with the Securities and Exchange Commission’s new Marketing Rule to off-channel communications surveillance, according to a just-released 2024 Investment Management Compliance Testing Survey, released by the Investment Adviser Association, ACA Group and Yuter Compliance Consulting.

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On the list of hot topics, advertising/marketing came in a close second, cited by 57% of respondents, and AI/predictive analytics debuted in third place, with 46% of respondents including this on their list.

The top areas of increased compliance testing include:

–Electronic communication surveillance/off-channel communications (73%)

–Advertising/marketing (65%)

–Cybersecurity (57%)

–Vendor due diligence (44%)

–Books and records (36%)

Other hot topics generally aligned with the SEC’s exam, enforcement and rulemaking priorities, according to the survey findings.

Ozy Media, CEO Convicted of Fraud After Staged Goldman Call

Ozy Media and Chief Executive Officer Carlos Watsonwere found guilty of defrauding investors in a case featuring allegations Watson coached his co-founder to impersonate a YouTube executive to get Goldman Sachs bankers to back the media startup.

A jury delivered its verdict on the former TV host and Ozy Media Tuesday in Brooklyn federal court following a six-week trial. Watson was immediately taken into custody after his bail was revoked by the judge.

The company and Watson, 54, were convicted of conspiracy to commit wire fraud and securities fraud, while Watson was also convicted of aggravated identity theft….

Platinum Partners Founder Mark Nordlicht Gets Six Months House Arrest for Fraud

Platinum Partners LP co-founder Mark Nordlicht, who was found guilty of fraud in New York federal court, was sentenced to six months of home confinement by a judge who has consistently expressed skepticism about the government’s case.

US District Judge Brian M. Cogan, who previously overturned Nordlicht’s conviction in 2019 only to have it reinstated by an appeals court, sentenced him on Tuesday in Brooklyn, New York, to two years probation. When delivering the sentence, the judge noted that Nordlicht had “lunged” at a female federal prosecutor during his trial.

Whistleblowing Is Less Likely if You Have an Integrity Program

Yes, I’m sure you’ve got a compliance program. It’s probably great. But now, more than ever, that’s not good enough. You also need an integrity program.

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Employees are fearful that raising concerns could be a career limiter. Fight that perception by publicly rewarding employees who have the courage to speak up when they see an issue. Or bring ethics out of the legal department by designating certain non-lawyer employees as “ethics ambassadors” in each department and encourage employees to go to them with questions.

However you do it, you need to set the tone from the top that you’re committed as a company to a culture of doing what’s right, then engage your employees as partners in that ethical journey.

Or get ready for the whistleblowers.

Binance Executive’s Nigerian Court Hearing Adjourned to October

A Binance Holdings Ltd. executive spent several hours back in a Nigerian court on Tuesday, before a judge adjourned the hearing until October.

Tigran Gambaryan, the head of financial-crime compliance at Binance whom US lawmakers say has been unjustly detained, is standing trial on charges including currency manipulation and money laundering.

He’s been held in the West African nation since February and was sent to prison in April. His current charges were laid by Nigeria’s Economic and Financial Crimes Commission. The next hearings were scheduled for Oct. 11 and Oct. 18.