UpFront » May 2020

A recent string of cases brought by the SEC have revealed a common theme – firms are doing a poor job including required customer disclosures for various offerings and activities. Founder and President Amy Lynch comments that marketing materials and other forms of firm communications are particularly lacking in the necessary disclosures for fees and expenses, conflicts of interest, and best execution issues. She adds that violations also result from lapses in communication between decision-makers…

The COVID-19 environment, now and post crisis, is likely to impact how the SEC views its priorities. This should include a renewed focus on regulation and rules for Business Continuity Plans (BCP), money market funds and financial disclosures, where concerns were exposed by the crisis and disruption of markets. Amy Lynch, Founder and President of FrontLine, sees the SEC scrutinizing firms’ BCPs and their effectiveness, both when firm employees first began working remotely, and when…

SEC exams are still occurring despite the COVID-19 environment, and FrontLine Compliance has been out front issuing guidance for CCOs and their compliance programs on how to stay prepared. FrontLine’s tips for the remote CCO, “How the Remote CCO Succeeds,” has been featured as providing important and effective ways for CCOs and their staff to keep their compliance programs on track despite challenging times. For private fund advisers, that means first and foremost compliance ensures…

A recent SEC settlement with a large brokerage entity may be a precursor for future cases focused on retail firms. It highlights the SEC’s current focus on complex financial products and harm to investors, and in this case, a firm providing misleading information about its wrap fee programs. Founder and President Amy Lynch explains that with the increase in the complexity of offerings to individuals, the SEC is bound to pursue investigations in this area.…

With broker-dealers now faced with Regulation Best Interest (Reg BI), moving to the dual registrant model seems like a viable solution to resolve the onerous task of overhauling marketing materials, as well as other firm and individual branding relying on the term “advisor.” However, FrontLine’s Founder and President, Amy Lynch, says not so fast. Ms. Lynch cautions that dual registrants have two different sets of regulations to comply with and a broker-dealer compliance program will…