February 9, 2024

The Securities and Exchange Commission adopted amendments to Form PF, the confidential reporting form for certain SEC-registered investment advisers to private funds, including those that also are registered with the Commodity Futures Trading Commission (CFTC) as commodity pool operators or commodity trading advisers. The amendments, which the CFTC concurrently adopted, are designed to enhance the ability of the Financial Stability Oversight Council (FSOC) to monitor and assess systemic risk and to bolster the SEC’s oversight of private fund advisers and the agency’s investor protection efforts. The SEC and CFTC also agreed to a memorandum of understanding related to the sharing of Form PF data. The fact sheet on the amendments is available here.

Read SEC Chair Gary Gensler’s statement here
Read SEC Commissioner Hester Peirce’s statement here.
Read SEC Commissioner Mark Uyeda’s statement here.
Read CFTC Commissioner Caroline Pham’s statement here.
Read CFTC Commissioner Kristin Johnson’s statement here.
Read SEC Commissioner Mark Uyeda and CFTC Commissioner Caroline Pham’s joint statement here.

The U.S. Supreme Court has held that consumers may sue federal agencies under the Fair Credit Reporting Act for failing to correct inaccurate information supplied to credit reporting agencies, resolving a circuit split on the issue. In a unanimous opinion written by Justice Neil M. Gorsuch, the Court on February 8 affirmed an appeals panel’s decision that federal agencies count as “persons” subject to the FCRA’s civil liability provisions, 15 U.S.C.A. §§ 1681n and 1681o.

Treasury Secretary Janet Yellen renewed her call for legislation for better oversight of stablecoins, though she said it’s possible those rules could look slightly different than the ones for banks. House Financial Services Committee Ranking Member Maxine Waters (D-CA) said in the following days that the Committee is “very, very close” on a deal for stablecoin legislation.  

The Treasury Inspector General for Tax Administration published a report entitled “Assessment of Processes to Grant Access to Sensitive Systems and to Safeguard Federal Tax Information.” The report outlines who has access to sensitive information at the IRS and how they access it.

The Consumer Financial Protection Bureau (CFPB) announced that it resolved an appeal in a long-running enforcement suit against a foreclosure relief scam operation for $12 million in consumer redress and penalties. Consumer First Legal Group, LLC and four attorneys, Thomas G. Macey, Jeffrey J. Aleman, Jason Searns, and Harold E. Stafford, allegedly charged millions of dollars in illegal advance fees to financially-distressed homeowners for legal representation the defendants promised but did not provide. The defendants will pay $10.9 million in consumer redress and a $1.1 million penalty into the CFPB’s victims relief fund. The individual defendants are covered by 8- or 5-year bans from the mortgage assistance industry, under the district court’s original order.

The Federal Trade Commission (FTC) released new data showing that consumers reported losing more than $10 billion to fraud in 2023, marking the first time that fraud losses have reached that benchmark. This marks a 14% increase over reported losses in 2022. Consumers reported losing more money to investment scams—more than $4.6 billion—than any other category in 2023. That amount represents a 21% increase over 2022. The second highest reported loss amount came from imposter scams, with losses of nearly $2.7 billion reported. In 2023, consumers reported losing more money via bank transfers and cryptocurrency than all other methods combined.

The SEC announced charges against five broker-dealers, seven dually registered broker-dealers and investment advisers, and four affiliated investment advisers for widespread and longstanding failures by the firms and their employees to maintain and preserve electronic communications. The firms admitted the facts set forth in their respective SEC orders, acknowledged that their conduct violated recordkeeping provisions of the federal securities laws, agreed to pay combined civil penalties of more than $81 million, and have begun implementing improvements to their compliance policies and procedures to address these violations.

The CFTC Global Markets Advisory Committee (GMAC) sponsored by Commissioner Caroline D. Pham, formally advanced eight recommendations to the Commission intended to enhance the resiliency and efficiency of global markets, including U.S. Treasury markets, repo and funding markets, and commodity markets.

The Energy Information Administration within the Department of Energy published for comment its proposal to extend its collection activities regarding cryptocurrency mining for three years in addition to seeking feedback regarding whether collection of information is necessary for the proper performance of agency functions, including whether the information will have a practical utility. Comments must be submitted by April 9, 2024.  

House Financial Services Committee Ranking Member Maxine Waters (D-CA) delivered remarks on the housing crisis during the Democratic Issues Conference 2024. Rep. Waters discussed the legislative package she is reintroducing, including the Housing Crisis Response Act, the Ending Homelessness Act, and the Downpayment Toward Equity Act.

Senator JD Vance (R-OH), along with Senators Thom Tillis (R-NC), Bill Hagerty (R-TN), Cynthia Lummis (R-WY), and Katie Britt (R-AL), sent a letter to SEC Chair Gary Gensler to raise concerns over an enforcement case in which the SEC used false statements as the basis to freeze assets and bank accounts of a cryptocurrency platform. The agency initially won court approval to freeze the assets of the platform through an expedited process known as an ex parte motion for a temporary restraining order where the defense is neither present nor given the opportunity to rebut the prosecution. However, the decision was later reversed after the court determined the agency made false statements to justify its enforcement action.

The Conference of State Bank Supervisors (CSBS) filed a comment letter stating that the Federal Deposit Insurance Corporation’s (FDIC) proposed corporate governance guidelines for certain state-chartered banks should be withdrawn. The letter states that the guidelines “would micromanage how a bank’s board functions, imposing a tangle of organizational requirements and procedural checklists.”

The Department of the Treasury (Treasury) published the 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing. These reports highlight the most significant illicit finance threats, vulnerabilities, and risks facing the United States. The reports discuss the ongoing fentanyl crisis, foreign and domestic terrorist attacks and related financing, increased potency of ransomware attacks, the growth of professional money laundering, the continued digitization of payments and financial services, and the use of digital assets for terrorist financing.

Read the 2024 National Money Laundering Risk Assessment here
Read the 2024 National Terrorist Financing Risk Assessment here
Read the 2024 National Proliferation Financing Risk Assessment here

Need to catch up on what happened earlier this week? Check out our February 7th Midweek Update here