The high-profile, high-penalty success cited by Director Ceresney will whet the SEC appetite for more investigations in this area. Private equity firms would be well advised to review Director Ceresney's speech and consider whether they are vulnerable to the kinds of enforcement actions he cites. The focus of a firm's internal reviews should be on practices that give rise to conflicts of interest.

Here are a few more recommendations to add to the OFR's list: (i) consider the costs of collecting the information, (ii) determine whether the means of requesting information are standardized adequately to yield comparable data from different sources, (iii) determine whether the means of transmitting the information actually exist, (iv) ascertain whether there is a way to store the information, (v) confirm that a method is in place for assessing the success or failure of the information…

Firms should review the broker-dealer's acceptance, waiver and consent letter ("AWC"), which indicates the kinds of measures that FINRA expects firms to implement in supervising the internal communications between research analysts and sales personnel. FINRA Chief of Enforcement, Brad Bennett, urged firms to exercise "extreme vigilance" when supervising internal communications between research analysts and the sales personnel in order to avoid revealing material nonpublic information before…

The Associations recognized that (i) the regulators tend to know less materially than the industry about cybersecurity, and (ii) industry participants have every incentive to improve their cybersecurity defenses. The philosophical question presented is whether the regulators can resist the temptation to adopt prescriptive rules. Such rules are more likely to impede the work that firms do than they are to be useful.

To find examples of overly prescriptive rules, one only has to…