On April 29, 2024, the U.S. Equal Employment Opportunity Commission (the “EEOC” or the “Commission”) published its “Enforcement Guidance on Harassment in the Workplace” (the “Guidance”), which outlines the legal standards for harassment and employer liability under the equal employment opportunity laws enforced by the Commission.  (See here.)  The Guidance replaces the five prior harassment guidance documents from the EEOC, issued between 1987 and 1999, and serves as a single resource for workplace harassment law.  The Guidance addresses several timely topics, including, but not limited to, protections for LGBTQ+ workers, harassment in the remote workplace, and the interplay between religious freedom and unlawful harassment.  The Guidance also includes over 70 illustrative examples of permissible and impermissible conduct.   

Continue Reading EEOC Updates Anti-Harassment Guidance for First Time in 25 Years

On April 17, 2024, the SEC’s Division of Examinations issued its latest risk alert regarding Rule 206(4)-1 of the Investment Advisers Act of 1940, known as the Marketing Rule. Following the examinations staff’s June 2023 and September 2022 risk alerts regarding areas of emphasis in examinations focused on compliance with the Marketing Rule, the latest risk alert highlighted initial observations from examinations of investment advisers’ compliance with the Marketing Rule and related rules under the Advisers Act. The risk alert focused on compliance with the Marketing Rule’s general prohibitions, Rule 206(4)-7 (the Compliance Rule), Rule 204-2 (the Books and Records Rule), and Form ADV disclosure requirements.

Continue Reading SEC Staff’s Latest Marketing Rule Risk Alert Highlights Initial Observations from Examinations

On May 9, 2024, the Department of Justice (“DOJ”) announced the formation of the Antitrust Division’s Task Force on Health Care Monopolies and Collusion (“HCMC”). The HCMC “will guide the division’s enforcement strategy and policy approach in health care, including by facilitating policy advocacy, investigations and, where warranted, civil and criminal enforcement in health care markets.”

Continue Reading DOJ Focus on Health Care Marches Forward with Formation of Task Force

On May 7, 2024, in Ryan, LLC v. FTC et al., Judge Ada Brown of the U.S. District Court for the Northern District of Texas set a briefing schedule on Ryan’s Motion for Stay of Effective Date and Preliminary Injunction (the “Motion”) attacking the FTC Final Rule banning employer-employee non‑compete restrictions, and ordered that she would rule on the merits of the Motion on or before July 3, 2024—two months before the FTC Final Rule is scheduled to become effective on September 4, 2024. 

Continue Reading Motion Seeking to Stay or Enjoin FTC Final Rule Banning Employer-Employee Non‑Competes Set for Ruling by July 3, 2024

After much anticipation, the U.S. Department of Labor (DOL) unveiled its Final Rule on April 23, 2024, increasing the salary that an employee must earn in order to qualify for the executive, administrative, professional and highly compensated employee “white collar” exemptions under the Fair Labor Standards Act (FLSA). Although the Final Rule will almost certainly face legal challenges and could be struck down, employers should still take the opportunity to evaluate and audit their employee exemption classifications in the event the new rule takes hold in July.

Continue Reading DOL’s Final Rule to Increase Salary Thresholds for Overtime Exemptions

On Tuesday, April 23, 2024, the Federal Trade Commission (“FTC”) voted 3-2 to adopt a Final Rule banning virtually all non-compete agreements between employers and employees.  The Final Rule will not go into effect until 120 days after its publication in the Federal Register (the “Effective Date”), and its enforcement could be further delayed or barred by court challenge or Congressional intervention. 

Continue Reading The FTC Adopts Final Rule Banning Employee Non-Compete Agreements

Chair/Commissioner Remarks and Litigation and Enforcement Trends

The U.S. Securities and Exchange Commission (the “SEC”) held its annual SEC Speaks conference—after a hiatus in 2023—on April 3 and 4, 2024 in Washington, D.C. The conference featured remarks from Chair Gary Gensler, Commissioner Hester Peirce, Commissioner Mark T. Uyeda, and Director of the Division of Enforcement (the “Division”) Gurbir S. Grewal, as well as panel discussions addressing current SEC initiatives, priorities, and enforcement trends for the upcoming year. The conference speakers and panels also provided an update on litigation, judicial, and legislative developments.

Continue Reading Highlights from SEC Speaks 2024

The Office of the Comptroller of the Currency (“OCC”) recently sought comment on a proposed rule designed to increase the transparency of the standards applicable to the OCC’s review of business combinations (i.e., bank mergers, consolidations or the assumption of deposits) involving national banks and federal savings associations (the “NPRM”).

Continue Reading Update: OCC Issues Notice of Proposed Rulemaking on Business Combinations

Our Investment Services team just published its March 2024 Regulatory Update, analyzing a wide selection of federal agency enforcement actions and initiatives in Q1.  You can access the articles below.

On February 13, 2024, the Financial Crimes Enforcement Network (FinCEN) issued a proposed rule1 that would extend certain anti-money laundering/countering the financing of terrorism (AML/CFT) program requirements to investment advisers registered with the Securities and Exchange Commission (SEC) and exempt reporting advisers (ERAs) with the SEC.

The proposed rule would require certain covered advisers (i.e., RIAs and ERAs) to apply certain AML/CFT requirements under the Bank Secrecy Act (BSA), including implementing AML/CFT programs, reporting suspicious activity and complying with recordkeeping requirements. The proposed rule would amend the definition of “financial institution” under the BSA to specifically include RIAs and ERAs, which have historically not been subject to most anti-money laundering requirements under U.S. law.

Anti-Money Laundering Program

The proposed rule would require covered advisers to maintain an AML/CFT program that:

  • develops internal policies, procedures and controls reasonably designed to address money laundering, terroristfinancing and other illicit financial risks;
  • designates one or more anti-money laundering compliance officers, who should be an officer of the coveredadviser (or individual with similar authority);
  • institutes an ongoing employee training program;
  • independently tests its AML/CFT program for compliance with applicable BSA requirements; and
  • implements risk-based procedures for conducting ongoing customer due diligence to (1) understand the nature and purpose of customer relationships for the purpose of developing a customer risk profile; and (2) identify and report suspicious transactions and, on a risk basis, to maintain and update customer information.

The proposed rule would require that each covered adviser’s anti-money laundering program be approved in writing by its board of directors or similar governing body or persons.

While aspects of a covered adviser’s anti-money laundering program may be delegated to third parties, the covered adviser would remain fully responsible and legally liable for the program.

Reporting Suspicious Activity

Covered advisers would be required to evaluate customer activity and relationships for applicable money laundering and illicit financial risks and design a suspicious transaction monitoring program tailored to such risks. In addition, the proposed rule would require covered advisers to file suspicious activity reports (SARs) relevant to possible violations of law or regulation with FinCEN.

Recordkeeping

The proposed rule would require covered advisers to create and maintain certain records relating to the transmittal of funds, including originator and beneficiary information, to be shared with other financial institutions in the payment chain.

Key Takeaways

If adopted, the proposed rule would represent significant additional compliance responsibilities and obligations with respect to the compliance programs of investment advisers, in the form of new and unique policies and procedures, the implementation of additional compliance processes and related testing, and additional dedicated resources. Covered advisers will be well served to begin preparing for these requirements now.

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