Overview
SEC Continues to Focus on MNPI-Related Deficiencies
The SEC continues to pursue actions against investment advisers for failures to maintain robust policies and procedures on the handling of material non–public information.
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CFTC Focus on Insider Trading Continues
On Aug. 3, 2020, the Commodity Futures Trading Commission settled an enforcement action with two New York Mercantile Exchange employees (and with NYMEX itself on a vicarious liability theory) for disclosing confidential information about futures trading activity to a third-party broker.
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Valuation Issues Continue to Be an SEC Priority
On Aug. 11, 2020, the SEC announced charges against the former chief executive officer of Direct Lending Investments LLC, an investment adviser, for violating the antifraud provisions of the federal securities laws.
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Expense-Related Issues Continue to Trigger SEC Enforcement Actions
On Aug. 7, 2020, the SEC sanctioned Rialto Capital Management for failing to properly disclose and allocate certain costs and expenses.
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CFTC Institutes Its First Anti-Money Laundering Rule Enforcement Action
On Aug. 10, 2020, a CFTC-registered futures commission merchant agreed to a settlement with the CFTC resolving allegations that it violated CFTC Rule 42.2 by administering a deficient anti-money laundering compliance program and failing to detect and report suspicious (and illegal) activity.
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SEC Revises Proxy Voting Guidance
On July 22, 2020, the SEC granted proxy advisory firms certain exemptions under the federal proxy rules, conditioned on — among other things — a requirement for proxy advisory firms to provide their recommendations to the subject public companies.
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Kentucky Supreme Court Dismisses Action Against Hedge Fund Managers; Case Then Revived by the Kentucky Attorney General
The Kentucky Supreme Court dismissed a $50-billion lawsuit against three hedge fund managers and their principals, holding that the plaintiffs — individual beneficiaries of Kentucky Retirement System defined-benefit plans — lacked standing.
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CCPA Regulations Finalized and Effective
On Aug. 14, 2020, the California Attorney General announced final regulations for the California Consumer Privacy Act (which largely mirror those proposed in June 2020 and which we discussed in an earlier alert) had received administrative approval and would become effective immediately.
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Applicability of the SEC’s Political Contributions Rule to Contributions to the Biden-Harris Campaign
On Aug. 11, 2020, Joe Biden announced that he had selected California Senator Kamala Harris to be the Democratic Party’s nominee for vice president of the United States. Many managers are considering whether there is any impact in allowing their employees to contribute to the campaign.
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EU Privacy — EDPB Publishes FAQs on Transfers of Personal Data From the EU
Following a recent decision of the Court of Justice of the European Union (ECJ) in Data Protection Commissioner v. Facebook Ireland Ltd and Maximillian Schrem (known as Schrem II), the European Data Protection Board has published Frequently Asked Questions on this decision.
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Proposed Amendments to MiFID II Published
The European Commission has recently published proposals to amend MiFID II.
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ESMA Comments on EU Fund Platforms
ESMA has published a letter addressed to the European Commission and highlighting a number of areas in which the regulation of EU funds could be improved in the context of the ongoing review of the Alternative Investment Fund Managers Directive (known as AIFMD II).