MVA White Collar Defense, Investigations, and Regulatory Advice Blog

The Federal Reserve Board (“FRB”) rarely issues denials for applicants to become members of the Federal Reserve System. Senator Elizabeth Warren has even criticized the FRB for their number of approvals – although in the context of bank mergers. Last Friday Custodia Bank (state chartered in Wyoming) received such a denial. Custodia Bank was formed to be “a compliant bridge between digital assets and the U.S. dollar payments system” and a digital asset custodian.

One of the difficulties digital asset companies, like Custodia Bank, have faced is being able to access the ...

In December 2021, the Bureau of Consumer Financial Protection (or the “CFPB”) issued a notice and request for comment (the “Notice”) on its intention to make a preemption determination regarding the Truth in Lending Act (“TILA”) and the State of New York’s Commercial Financing Law, which imposes disclosure requirements on certain commercial lending transactions (the “New York CFL”). The preemption determination had been requested by the Small Business Finance Association (the “SBFA”), a non-profit advocacy organization for its members who provide ...

In 2020, we wrote about the increased regulatory attention on financial institutions’ obligations to detect and respond to human trafficking. In 2021, we wrote about how anti-human trafficking programs fit squarely in banks’ risk management and ESG platforms. As 2022 comes to a close, we add to these alerts an area of emerging potential bank liability – civil actions alleging failure to detect and respond to human trafficking.  

A few weeks ago, two sex trafficking survivors filed lawsuits against two international financial institutions including claims under the ...

Most entities formed or registered to do business in the U.S. will, beginning January 1, 2024, be required to self-report beneficial ownership information to the U.S. Treasury’s Financial Crimes Enforcement Network (“FinCEN”). The new federal database, to be known as “BOSS” (Beneficial Ownership Secure System), is not yet online, but FinCEN on Friday, September 30 published the final regulations[1] implementing beneficial ownership information disclosure requirements pursuant to the Corporate Transparency Act (“CTA”)[2] passed by Congress in 2021 ...

On August 11, 2022, the Consumer Financial Protection Bureau (“CFPB”) issued a circular (Circular 2022-04 or, the “Circular”) addressing whether insufficient data and information security practices can violate the prohibition against unfair acts or practices in the Consumer Financial Protection Act (“CFPA”). The CFPB concluded that inadequate security practices could give rise to a claim not only under federal data security laws like the Gramm-Leach-Bliley Act (“GLBA”), but also under the CFPA as well. The Circular discusses the elements of a claim under the CFPA and identifies a few specific practices that the CFPB identified as likely giving rise to a violation of the CFPA. The Circular, however, does not otherwise provide direction to the industry on expected information security practices.

* Published by Westlaw Today

FINRA has continued its efforts to expand protections for “specified adults” by amending its Rule 2165.[1] Prior to the amendments, FINRA Rule 2165 allowed FINRA member firms to place temporary holds on disbursements of funds and securities in situations involving the financial exploitation of those individuals. With the amendments (which went effective on March 17, 2022), FINRA has indicated that it has created the first uniform national standard for placing temporary holds on securities transactions in the accounts of these customers in ...

For those tracking developments impacting the crypto-asset space, the summer has been far from slow and leisurely. Multiple industry alerts flow daily with news of new legislative proposals, enforcement actions, and other events or issues impacting the industry. The news is inevitably accompanied by calls for greater legal certainty regarding crypto-asset characterization and clarity around the regulatory framework governing the industry. While news flows quickly, the pace of substantive developments, however, has been frustratingly slow for many. Unmoved by demands for ...

In a prior post, we discussed the recent proposed rules from the Securities and Exchange Commission (“SEC”) and Commodity Futures Trading Commission (“CFTC”) regarding certain non-public information reported to the SEC and the CFTC in the Form PF. Most of the rule is discussing information and requirements that are not related to or focused on digital assets. However, in one part, there is a proposal to request information from private funds about their “digital assets”.

The definition from the SEC and CFTC for “digital assets” is broad and all encompassing. As a ...

The Securities and Exchange Commission (“SEC”) and Commodity Futures Trading Commission (“CFTC”) (collectively, the “Agencies”) jointly proposed a rule (the “Proposed Rule”) that would impact existing confidential reporting obligations of private equity funds and other collective investment vehicles not registered as an “investment company” (referred to as, “Private Funds”). The rule proposes changes to the Form PF, a non-public report for certain SEC-registered investment advisers to Private Funds, which get submitted to the SEC (and CFTC ...

A Bloomberg article last week suggests potentially more bad news is on the way for Coinbase Global Inc. (“Coinbase”). Coinbase is reportedly facing an investigation by the U.S. Securities and Exchange Commission (“SEC”) into whether it let customers trade digital assets that the SEC believes should have been registered as securities. Rumors of investigations by the SEC do not necessarily suggest problems for the company at the center of those rumors, but the timing of a recent SEC complaint (SEC v. Wahi) may explain why this report had such a negative effect on Coinbase’s ...