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Wishing One-and-All a Happy, Healthy and Prosperous New Year

We hope each of you found some peace and tranquility in the company of loved ones this holiday season and want to wish one-and-all a happy, healthy and prosperous New Year.

As the lights dim on 2016, we naturally want to prophesy 2017. However, with so much friction, division and uncertainty in our world, most predictions would be at best – a good guess. As such, we will leave such predictions to others, whether it be geopolitical, country-specific or related to the financial services industry, and will enjoy tracking other’s soothsaying. Instead, at this time, we believe it is best to be guided by a strong moral compass, focus on what we know, learn about what we don’t know, remain vigilant to our surroundings and adjust as necessary.

This does not mean we should sit still and wait; on the contrary, we should expect change even if we do not know what form it will take. Pertinent to CCOs, change may come in the form of regulations, business initiatives, available resources, changed workflows, systems, and potentially new firm personnel. For a CCO, the one constant that always accompanies change is the need to assess the corresponding change to the firm’s risk profile. As we transition to the new year, every CCO should ensure they have robust risk assessment procedures that can identify and quantify, on a timely basis, changes to their risk profile and adjust compliance programs accordingly.

Is the industry headed for significant deregulation? On November 8, 2016, Donald Trump won the presidency in an extraordinary election that will not soon be forgotten. Throughout his campaign, Mr. Trump spoke to many issues, and several were directed at the financial services industry. His campaign promises included repealing portions of Dodd Frank as well as the overall rolling back of federal regulations.

Some administrative fallout began on November 14, 2016, when Securities and Exchange Commission Chairperson, Mary Jo White, declared that she would resign from her post, effective January 1, 2017. While it is not clear who Mr. Trump would nominate to fill the vacant post, many believe it is likely to be an individual more in line with his agenda of more deregulation.

Still, Dodd-Frank appears unlikely to be overturned in its entirety. For now, Senate rules, in effect, would require 60 votes to bring any legislation overhauling Dodd-Frank to a vote, and Republicans currently stand to control 52 seats in the coming Senate.

As Mary Jo White said at a recent Investment Advisor Committee, “It is inevitable and entirely appropriate that these reforms be reviewed, incrementally improved, and made more efficient as we learn from their operation in the market. But, in my view, it would be a grave mistake to weaken, let alone dismantle, these core post crisis reforms.”

In 2016, it seemed like more of our clients had SEC exams than in recent memory and the direction remains unchanged at this point. A fairly common topic in our discussions with examiners is always risk. Those registrants that had a process and could articulate how changes to their risk profile resulted in corresponding changes to their policies and procedures had an easier time presenting their compliance programs. Do not wait until your annual review (or your next exam) to address risks.

There have been so many changes in our lives and the world around us, we can only imagine what 2017 will bring. With the unknown looming future, we continue to assess what this means for CCOs. As compliance consultants, we are always sensitive to the liability incurred by CCOs.

In 2016, we ran a series of whitepapers addressing the issue of CCO liability, which were published in NSCP’s newsletter, Currents. The final edition in the series discussed CCO indemnity and insurance options, and raised certain questions that all directors and officers should be asking, and provided answers from several experts in the insurance, legal and cybersecurity sectors. Reviewing and updating your insurance portfolio is something we believe every CCO should do in early 2017.

Thanks for your continued support.

Newsletter

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Communiques

Pre-Dating & Back-Dating are Equally Risky

The SEC today suspended three accountants formerly of BDO USA LLP for improper professional conduct during its 2013 audit of AmTrust Financial Services Inc., an exchange-listed insurance company. According to the... read more »

Fiduciary Duty

On Friday, September 28, 2018 the SEC charged LendingClub Asset Management (LCA) and its former president Renaud Laplanche with fraud for improperly using fund money to benefit LendingClub Corporation (LendingClub),... read more »

Exciting Summer Project -- Dig Into Some Sand or Dig Into Your Firm's Best Ex Pr…

The Office of Compliance Inspections and Examinations (OCIE) issued a risk alert July 11 targeting investment advisers’ most common deficiencies with regard to their best execution obligations under the Investment... read more »

SEC Adopts Fund Liquidity Reporting and Disclosure Changes

The final week of June was a busy one for SEC releases following the SEC’s June 28th open meeting. Among these was a revisit of Rule 22e-4 under the Investment... read more »

More SEC Settlements - This Time Form PF Filing Deficiencies

On June 1st, the SEC announced settlements with 13 RIAs who repeatedly failed to file Form PF reports. Most of these firms never filed over the review period (2012 through... read more »

Two Recent Enforcement Actions Against Private Fund Advisers

The industry should not misinterpret the SEC’s 2018 National Exam Program Priorities as a shift away from private fund advisers. As discussed during the SEC’s recent National Compliance Outreach Seminar... read more »

Events

Chief Compliance Officer Roundtable: Breakfast Briefing - November 8, 2018

When: November 8, 2018 Where: Blank Rome LLP | The Chrysler Building | 405 Lexington Avenue | New York, NY 10174 | 22nd Floor Boardroom | Phone: 212.885.5000 Schedule: 9:00-9:30am - Networking...

Dorsey PF 2018 Symposium

When: September 26, 2018 (8:30 am - 6 pm Where: Dorsey & Whitney LLP | 51 W. 52nd Street | New York, NY 10019 Directions > SEC3’s President, Janaya Moscony will join...

Chief Compliance Officer Roundtable: Breakfast Briefing - June 14, 2018

When: June 14, 2018 Where: Blank Rome LLP | The Chrysler Building | 405 Lexington Avenue | New York, NY 10174 | 22nd Floor Boardroom | Phone: 212.885.5000 Schedule: 9:00-9:30am - Networking...

Webinar: 2018 SEC Exam Priorities & Recent Exam Highlights

Don’t miss the opportunity to meet with us in person to discuss the topics that matter most to you. Tobin S. Cochran, Managing Member/President of Focus 1 Associates, LLC and...

Chief Compliance Officer Roundtable: Breakfast Briefing - February 7, 2018

When: February 7, 2018 Where: Blank Rome LLP | The Chrysler Building | 405 Lexington Avenue | New York, NY 10174 | 22nd Floor Boardroom | Phone: 212.885.5000 Schedule: 9:00-9:30am - Networking...

Upcoming Events - September & October 2017

Upcoming Events Don’t miss the opportunity to meet with us in person to discuss the topics that matter most to you. SEC3 is teaming up with industry experts in NYC to discuss...

May 23, 2017 - Webcast: WannaCry Ransomware: Were You Really Protected or Just L…

When: Tuesday, May 23rd, 2017 | Schedule: 12pm - 1pm EST Who: Paul Caiazzo, CEO and Co-Founder, TruShield Security Solutions Michael Brice, Founder, BW Cyber Services John Lukan, Managing Director, SEC Compliance Consultants, Inc. We...

June 14, 2017 - Compliance Breakfast Briefing

8:30-9:00am - Networking and Continental Breakfast 9:00-10:30am - Program Location: Willkie Farr & Gallagher LLP | 600 Travis Street | Suite 2310 | Houston, TX Barry Barbash from Willkie Farr & Gallagher LLP,...

June 13, 2017 - Compliance Breakfast Briefing

8:30-9:00am - Networking and Continental Breakfast 9:00-10:30am - Program Location: Haynes and Boone, LLP | 2323 Victory Avenue | Suite 700 | Dallas, TX 75219 Validated parking is available in the garage attached...

May 31, 2017 - Chicago

9:00-9:30 a.m - Networking and Continental Breakfast 9:30-11:00 a.m - Program Location: Baker & McKenzie LLP | 300 East Randolph Drive | Suite 5000 | Chicago, IL 60601 Kristin Gonzalez and Jerome Tomas...

May 17, 2017 (NYC WIMF)

This event is by invitation only. Please email info@seccc.com to learn more.

May 15, 2017 (NYC Chief Compliance Officer Roundtable)

9:00-9:30am - Networking and Continental Breakfast 9:30-11:00am - Program Location: Blank Rome LLP | The Chrysler Building | 405 Lexington Avenue | New York, NY 10174 | 22nd Floor Boardroom | Phone:...

Webcast: The Most Insidious Cybersecurity Threat Is Also The Least Understood

When: Tuesday, April 25th | Schedule: 12pm - 1pm EST Who: Paul Caiazzo, CEO and Co-Founder, TruShield Security Solutions Michael Brice, Founder, BW Cyber Services John Lukan, Managing Director, SEC Compliance Consultants, Inc. Ransomware, the...

CCO Liability (Part III): Managing Liability Webinar

In this webinar, panelists discuss indemnifications and insurance as potential remedies to address the direct financial risks to a CCO. Attendees will learn: What terms and conditions should Chief Compliance Officers be...

Webinar: CCO Liability (Part III): Managing Liability: Navigating Indemnities an…

When: Tuesday, February 21, 2017 Schedule: 11:00am ET / 10:00am CT / 9:00am MT / 8:00am PT / 7:00am AT Description of Webinar: The National Society of Compliance Professionals is pleased to host...