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On 20 August, 2024, the U.S. Securities and Exchange Commission (SEC) issued a crucial order adjusting the registration fee rates for fiscal year 2025, set to take effect on 1 October, 2024. This adjustment, detailed in the "Order Making Fiscal Year 2025 Annual Adjustments to Registration Fee Rates," establishes a new fee rate of $153.10 per million dollars of securities registered. The SEC's move reflects its ongoing commitment to ensuring that the fees collected are aligned with the regulatory demands of overseeing a dynamic and complex financial market. This change underscores the SEC's role in maintaining a robust regulatory framework that protects investors and ensures market integrity. The impact of this rule change will be felt across a broad spectrum of companies that are required to register their securities with the SEC. The adjusted fee rate will inevitably lead to increased costs for these companies as they prepare to issue new securities. For large corporations issuing...

On 20 August, 2024, in a decisive move against financial fraud, the Commodity Futures Trading Commission (CFTC) announced that it has issued an order against Get Money Tradez LLC (GMT) and its managing member, Jeffrey Carmon, Jr., based in Houston, Texas, requiring them to pay more than $520,000 in penalties and restitution. The CFTC found that the respondents had engaged in a fraudulent scheme involving two forex trading pools, soliciting nearly $1 million from 19 unsuspecting participants, only to misappropriate significant portions of those funds for personal use. The investigation revealed that from July 2021 to the present, GMT and Carmon solicited $950,000 from the public under false pretenses. Carmon falsely claimed to be a highly successful forex trader, despite suffering net losses in 17 out of 19 months from January 2020 to July 2021. Instead of fulfilling his promises to invest the pool participants’ funds, Carmon misappropriated at least $113,000, which he diverted for...

On 19 August 2024, in response to public concerns regarding the protection of national data by financial institutions (FIs), the Monetary Authority of Singapore (MAS) issued a strong statement reaffirming its commitment to the stringent safeguarding of customer data. This follows a letter by Dr. Pei Sai Fan, published in Lianhe Zaobao on 10 August 2024, which called for enhanced protection of citizens' data held by insurance companies and other financial institutions. MAS has made it clear that all FIs, including insurers, must implement robust and comprehensive IT security measures to ensure that customer data is shielded from unauthorized access or disclosure. This directive is part of the broader regulatory framework under which MAS-licensed insurers operate, ensuring that they maintain sound IT security policies as a fundamental aspect of their operations. These requirements are in line with Singapore's commitment to maintaining a secure and resilient financial ecosystem,...

On 19 August 2024, in a decisive move to uphold the integrity of Singapore's financial advisory sector, the Monetary Authority of Singapore (MAS) issued a nine-year prohibition order (PO) against Mr. Hoi Wei Kit, a former representative of OCBC Bank. This action follows Mr. Hoi's conviction for multiple serious offences under the Penal Code (PC) and the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA). The prohibition order is a clear message from MAS about its zero-tolerance policy towards financial misconduct, particularly when it involves a breach of trust with clients. The criminal activities committed by Mr. Hoi occurred between October 2017 and January 2018, during which he defrauded five OCBC customers. By falsely claiming that OCBC was offering time deposit accounts, Mr. Hoi induced these customers to sign up for these non-existent products. He then transferred a total of $170,000 from their accounts into his own personal bank...

On 19 August 2024, the Monetary Authority of Singapore (MAS) today announced the issuance of a one-year prohibition order (PO) against Mr. Aw Jun Ray, Reko Corinthians, a former representative of HSBC Bank. The PO, which takes effect immediately, prohibits Mr. Aw from engaging in any financial advisory services and participating in the management, directorship, or substantial shareholding of any financial advisory or capital markets services firms regulated under the Financial Advisers Act (FAA) and the Securities and Futures Act (SFA). The enforcement action against Mr. Aw is grounded in strict legislative provisions that govern the conduct of financial advisory professionals in Singapore. Under Section 32(2)(b) of the Financial Advisers Act 2001, any individual who, in connection with their principal’s lodgment of any document, omits to state any matter or thing that results in the document being misleading in a material respect, is guilty of an offence. The penalty for such an...

On 15 August, 2024, Google has come under legal fire as it faces a $5 million lawsuit filed by Maria Vaca, who alleges that a fraudulent crypto wallet app she downloaded from the Google Play Store led to the complete loss of her savings. The lawsuit, filed in a California state court, centers on the claim that Google should be directly responsible for the security of the apps it hosts, especially those that handle sensitive financial transactions, such as cryptocurrency. According to the lawsuit, Vaca downloaded what she believed to be a legitimate crypto wallet from the Play Store, trusting in the platform's reputation and the apparent authenticity of the app. However, shortly after installation, the app turned out to be malicious, effectively draining $5 million worth of her digital assets. The details regarding which specific crypto assets were stolen or the identity of the app have not been disclosed, leaving a cloud of uncertainty over the exact mechanisms used in the scam. This...

On 15 August, 2024, the International Monetary Fund (IMF) published a blog proposing significant increases in energy taxes aimed at crypto miners and artificial intelligence data centers, suggesting that such measures could play a crucial role in reducing global carbon emissions. According to a recent paper by IMF economists Shafik Hebous and Nate Vernon-Lin, raising electricity costs for these industries would not only encourage greater efficiency but also generate substantial government revenue. The IMF’s paper highlights that increasing electricity prices for crypto mining by 85% could potentially yield an additional $5.2 billion in annual global revenue while simultaneously reducing carbon emissions by 100 million tons—equivalent to the annual emissions of Belgium. The energy-intensive nature of both crypto mining and AI data processing is at the heart of this proposal, with a single Bitcoin transaction consuming as much electricity as an average person in Ghana or Pakistan uses...

On 15 August, 2024, Goldman Sachs made headlines by disclosing significant investments in Bitcoin exchange-traded funds (ETFs) in its quarterly 13F filing, signaling a notable shift in the bank's approach to cryptocurrency. Once a vocal skeptic of digital assets, Goldman Sachs has now become one of the largest institutional holders of Bitcoin ETFs, with positions in seven out of the 11 Bitcoin ETFs available in the U.S. market. This move, totaling $418 million in Bitcoin fund investments, marks the bank’s official debut in the spot Bitcoin ETF market. The largest portion of Goldman Sachs’ Bitcoin ETF holdings is in the iShares Bitcoin Trust, where the bank has invested $238.6 million. Other substantial positions include $79.5 million in Fidelity’s Bitcoin ETF, $56.1 million in Invesco Galaxy’s Bitcoin ETF, and $35.1 million in Grayscale’s GBTC. These investments are part of a broader trend among major financial institutions that have started to embrace cryptocurrencies, particularly...

On 14 August, 2024, the Securities and Exchange Commission (SEC) announced a landmark enforcement action against 26 broker-dealers, investment advisers, and dually-registered entities for widespread and systemic failures in maintaining and preserving electronic communications, resulting in combined civil penalties of $392.75 million. This sweeping action, which includes major financial firms such as Ameriprise Financial Services, Edward D. Jones & Co., and RBC Capital Markets, shows the SEC's unwavering commitment to upholding the integrity of the financial markets by ensuring strict compliance with federal recordkeeping requirements. They acknowledged that their conduct violated key recordkeeping provisions under federal securities laws. This settlement marks one of the most significant enforcement actions in recent years, reflecting the SEC's commitment to enforcing compliance with books and records requirements, which are foundational to the integrity of financial markets. The...

On 14 August, 2024, the Securities and Exchange Commission (SEC) Chairman Gary Gensler released a statement highlighting the growing influence of artificial intelligence (AI) in financial markets and the potential risks it poses to investors. With AI increasingly embedded in everyday digital experiences, from search algorithms to personalized marketing, the SEC's attention has turned to its application in the financial sector, particularly in investment platforms and brokerage services. The rise of AI has brought significant advancements in the ability to process vast amounts of data, recognize patterns, and make predictions. This technology allows companies to "narrowcast," tailoring messages, pricing, and products to individual consumers with unprecedented precision. In the financial sector, this manifests in the use of Robo-advisors and brokerage applications that rely on AI algorithms to provide personalized investment recommendations and alerts. However, as SEC Chairman Gary...

On 14 August, 2024, the Commodity Futures Trading Commission (CFTC) levied significant penalties on three prominent financial institutions—Truist Bank, The Toronto Dominion Bank (TD Bank), and Cowen and Company—for pervasive failures related to recordkeeping, supervision, and the improper use of unapproved communication methods. These enforcement actions are a stark reminder of the critical importance of compliance with federal securities laws and CFTC regulations, with cumulative penalties reaching into the millions of dollars. Truist Bank, a leading financial services provider based in North Carolina, has been ordered to pay a $3 million civil monetary penalty after the CFTC found that the bank failed to maintain, preserve, or produce records as required under CFTC recordkeeping regulations. The CFTC’s investigation revealed that from December 2019 through the present, Truist employees, including senior executives, engaged in business-related communications using unapproved methods...