UpFront » September 2024

The SEC wants firms to self-report compliance violations. But is that a good strategy and are there really benefits to self-reporting? Recent SEC cases penalizing firms for failures to adequately monitor off-channel communications have prompted a closer look at the value in self-reporting violations discovered internally. With comments featured in the Financial Planning story, FrontLine Compliance Founder and President Amy Lynch explains that SEC settlements with three firms show that self-reporting offers little benefit and…

The SEC’s new proxy voting rule has required disclosures that are intended to benefit investors with useful information. According to Amy Lynch, FrontLine’s Founder and President, the primary difference between the former rule and its newer version is the disclosure component on lent securities. The total number of shares a fund voted on for a certain issue must be made public, including the number of shares not voted on due to being out on loan.…

There should be heightened compliance around employee political contributions now that the SEC has brought cases during the last few months based on its “pay-to-play” rule. In an election year of increased frequency of contributions to public officials, the SEC has been keying in on compliance with the rule at firms that manage investment mandates for state pensions or endowments, or those firms seeking advisory business from them. FrontLine Compliance Founder and President Amy Lynch…

According to a survey on Chief Compliance Officer compensation, the pay for CCO positions at funds and money managers rose to their highest levels during the previous year. However, the average annual compensation of slightly more than $500,000 for CCOs needs to be balanced with pay decreases in the years before due to market conditions, according to Management Practice, Inc., the firm conducting the survey. Amy Lynch, FrontLine’s Founder and President, comments that an industry…

Impersonation scams that pose as executives and staff of well-known money managers and hedge funds are popping up across social media platforms and instant messaging apps. In most cases, the scams seek to commit fraud by offering phony investment opportunities by the firms and individuals they are impersonating. FrontLine Compliance Founder and President Amy Lynch expects these types of investment scams to grow amid the rise of AI and new technologies. Ms. Lynch comments that…