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September 11, 2014

The SEC announced accounting and disclosure fraud charges against a bank holding company for failing to report the true volume of loans that were at least 90 days past due, which increased substantially in number during the financial crisis. An SEC investigation found that, as the real estate market declined in 2009 and 2010 and its construction loans began to mature without repayment or completion of the underlying project, the bank did not renew, extend or take other appropriate action for 90 days or more on a material amount of its matured loans. According to the SEC Order, instead of fully

September 15, 2015
Commentary by Steven Lofchie

An administrative law judge dismissed an insider trading case brought by the SEC against a trader at an investment bank. The case examined the personal benefit prong of the "misappropriation theory". The inside information was provided by a research analyst at the bank and concerned an imminent change in the rating of a security. Administrative Law Judge Jason S. Patil concluded that the SEC Division of Enforcement failed to meet its burden of proof in attempting to show that the insider tip was offered in exchange for a personal benefit and that, given the absence of proof of personal benefit

September 17, 2015

SEC Chief Accountant James Schnurr discussed the SEC's key accounting priorities at the AICPA National Conference on Banks and Savings Institutions. The priorities he outlined included (i) the implementation of the new revenue recognition standard, (ii) the upcoming release of the Financial Accounting Standards Board's new credit impairment standard and (iii) reconsideration of issues related to the International Financial Reporting Standards.

December 29, 2015

FINRA ordered an investment bank to pay more than $10 million in restitution for suitability violations relating to mutual fund transactions. FINRA found that from January 2010 through June 2015, the bank's supervisory systems were not sufficient to prevent unsuitable switching. In particular, the firm incorrectly defined a mutual switch in its supervisory procedures to require three separate transactions within a certain time frame. Based on this incorrect definition, the bank (i) failed to act on thousands of automated alerts for potentially unsuitable transactions, (ii) excluded

January 15, 2016

The Board of Governors of the Federal Reserve System, the FDIC and the Office of the Comptroller of the Currency ("OCC" and, collectively, the "agencies") expressed their support of the March 2014 guidance on the "external audits of banks" by the Basel Committee on Banking Supervision ("BCBS"). While recognizing that the existing practices in the United States are broadly consistent with the BCBS guidance, the agencies also acknowledged that "differences exist between the standards and practices followed in the United States and the principles and expectations" in the BCBS guidance. For that