On May 28, 2020, FINRA issued its Regulatory Notice 20-16 sharing firms’ WFH practices observed to date. They include common practices adopted across most industries, as one would expect.
During the TRANSITION TO WFH, firm practices included:
- Increased Customer Assistance through outreach and web-based communications, to ensure customers knew how to access representatives and other resources;
- Location Monitoring & Contact Lists to know where staff were and ensure they knew how to stay in touch;
- Increased Support for staff, including more frequent training and ...
On May 8, FINRA filed an expedited request for an immediate rule change that would allow service by email, extensions of time, and video-conference hearings in member-application, disciplinary proceedings and appeals. FINRA notes that the COVID-19 work-from-home (“WFH”) environment makes it “exceedingly difficult to send and receive hard copy mail and conduct in-person meetings and hearings.” The rule change is expected to be temporary through June 15, subject to another later filing extending the provisions if and as necessary.
FINRA previously made similar ...
The United States Department of Justice ("DOJ") has filed the first criminal action for fraud in connection with PPP loans. Documents unsealed May 5 in the United States District Court for the District of Rhode Island accuse David A. Staveley, aka Kurt D. Sanborn, 52, of Andover, Massachusetts, and David Butziger, 51, of Warwick, Rhode Island, of seeking over $500,000 in PPP loans for four businesses that they did not own, or were closed prior to the pandemic.
The criminal complaint charges both men with conspiracy to make false statements to influence the SBA and conspiracy to commit ...
In a May 4 joint public statement, SEC Chair Clayton and Municipal Securities Office Director Rebecca Olsen urged municipal issuers to make voluntary disclosures specific to issuers, and their various outstanding municipal securities, regarding the effect of COVID-19 on present and expected future operating and financial status.
Municipal issuers are obligated under SEC Rule 15c2-12 to provide annual audited financial disclosures and disclosures of certain material events. The MSRB’s description of the Rule is here.
The SEC’s statement emphasized the relative size and ...
On April 27, the SEC’s Division of Investment Management updated its COVID-19 FAQs to reflect the Staff’s position that small investment advisers must report the “nature, amounts and effects” of PPP loans if potentially material to their ability to serve clients and meet contractual obligations.
Question 11.4 provides:
Q. I am a small advisory firm that meets the requirements of the Paycheck Protection Program (PPP) established by the U.S. Small Business Administration in connection with COVID-19. If I receive or have received a PPP loan, what are my regulatory reporting ...