Federal Regulatory Agencies
Federal Regulatory Agencies
Documents from federal regulatory agencies ranging from the Securities Exchange Commission to the Commodities Futures Trading Commission.
Featured Stories
SEC Obtains Final Judgment Against Texas Oil & Gas Promotor, His Companies in Offering Fraud Scheme
WASHINGTON, March 18 -- The Securities and Exchange Commission issued the following litigation release (No. 3:13-cv-04861-K; N.D. Tex. filed Dec. 12, 2013) involving Arcturus Corp., Aschere Energy LLC and Leon Ali Parvizian aka Alex Parvizian:* * *
On January 28, 2025, the U.S. District Court for the Northern District of Texas entered a final judgment against Defendants Leon Ali Parvizian a/k/a Alex Parvizian ("Parvizian") and his two Dallas-based companies, Arcturus Corporation and Aschere Energy LLC (together, "the Parvizian Defendants"). The entry of the final judgment resolves all claims ... Show Full Article WASHINGTON, March 18 -- The Securities and Exchange Commission issued the following litigation release (No. 3:13-cv-04861-K; N.D. Tex. filed Dec. 12, 2013) involving Arcturus Corp., Aschere Energy LLC and Leon Ali Parvizian aka Alex Parvizian: * * * On January 28, 2025, the U.S. District Court for the Northern District of Texas entered a final judgment against Defendants Leon Ali Parvizian a/k/a Alex Parvizian ("Parvizian") and his two Dallas-based companies, Arcturus Corporation and Aschere Energy LLC (together, "the Parvizian Defendants"). The entry of the final judgment resolves all claimsarising out of the SEC's Complaint, filed on December 12, 2013, which alleged that the Parvizian Defendants defrauded investors when they raised over $22 million between 2007 and 2011 through an unregistered offering of interests in six oil and gas well drilling projects, and that Parvizian acted as an unregistered broker. The Complaint charged the Parvizian Defendants with violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. In addition, the Complaint charged Parvizian with violations of Exchange Act Section 15(a).
On October 6, 2021, the Parvizian Defendants consented, without admitting or denying the SEC's allegations, to a partial judgment resolving liability and deferring the imposition of remedies, if any, to be determined by the Court after briefing. That same day, the Court issued the agreed partial judgment. Thereafter, on March 1, 2022, the Commission filed its Motion for Remedies ("Motion") against the Parvizian Defendants.
On January 28, 2025, the Court issued a Memorandum Opinion and Order granting the Commission's Motion in full. In addition, the Court entered a final judgment ordering the Parvizian Defendants to pay, jointly and severally, disgorgement of $9,844,127, plus prejudgment interest thereon of $938,770.65, and civil penalties of $500,000, and imposed permanent injunctions against future violations of the antifraud, securities-registration, and broker-registration provisions of the federal securities laws identified above.
The SEC's litigation was led by Jennifer D. Reece, Chris Rogers, Jason Reinsch, and Ty Martinez, and was supervised by Keefe M. Bernstein, all of the Fort Worth Regional Office.
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Resources
* Final Judgment (https://www.sec.gov/files/litigation/litreleases/2025/judg26269.pdf)
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Original text here: https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26269
SEC Charges New Jersey Investment Adviser, His Firm With Fraud and Other Violations
WASHINGTON, March 18 -- The Securities and Exchange Commission issued the following litigation release (No. 2:25-cv-01920; D.N.J. filed Mar. 17, 2025) involving Upright Financial Corp. and David Yow Shang Chiueh:* * *
Today, the Securities and Exchange Commission announced that it has filed charges against David Yow Shang Chiueh of East Hanover, New Jersey and his investment advisory firm, Upright Financial Corp., for misconduct and for investing more than 25 percent of Upright Growth Fund's assets in a single company over multiple years, causing losses of $1.6 million.
In November 2021, Chiueh ... Show Full Article WASHINGTON, March 18 -- The Securities and Exchange Commission issued the following litigation release (No. 2:25-cv-01920; D.N.J. filed Mar. 17, 2025) involving Upright Financial Corp. and David Yow Shang Chiueh: * * * Today, the Securities and Exchange Commission announced that it has filed charges against David Yow Shang Chiueh of East Hanover, New Jersey and his investment advisory firm, Upright Financial Corp., for misconduct and for investing more than 25 percent of Upright Growth Fund's assets in a single company over multiple years, causing losses of $1.6 million. In November 2021, Chiuehand Upright settled SEC charges that they, as investment advisers to Upright Growth Fund, violated its policy by investing more than 25 percent of its assets in one industry between July 2017 and June 2020, committing fraud and breaching their fiduciary duties. Despite being ordered to stop this conduct, the SEC's complaint alleges, the defendants continued their fraud by violating the 25 percent industry concentration limit and making misrepresentations about it between at least November 24, 2021, and June 23, 2024. As a result, the complaint alleges that the defendants' decision to wait more than two-and-a-half years to sell the relevant stock resulted in losses of approximately $1.6 million to the fund and its investors.
Additionally, the SEC's complaint alleges the defendants engaged in further misconduct during this same period when Chiueh operated the fund's board without the required number of independent trustees and misrepresented the independence of one in filings. The defendants also failed to provide or withheld key information from the board, according to the complaint, and they hired an accountant for the fund without the required vote by the board.
The SEC's complaint, filed in federal court for the District of New Jersey, charges the defendants with violating Sections 17(a)(1) and 17(a)(3) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5(a) and 10b-5(c) thereunder, Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 ("Advisers Act"), and Section 15(c) of the Investment Company Act of 1940 ("Investment Company Act"). The complaint charges Chiueh with violating Securities Act Section 17(a)(2), Exchange Act Section 10(b) and Rule 10b-5(b) thereunder, and Advisers Act Section 206(4) and Rule 206(4)-8(a)(1) thereunder. The complaint charges Chiueh with aiding and abetting Upright Investments Trust's violations of Securities Act Section 17(a)(2), Exchange Act Section 10(b) and Rule 10b-5(b) thereunder, and Investment Company Act Section 10(a). The complaint also charges the defendants with aiding and abetting Upright Investments Trust's violations of Investment Company Act Sections 13(a)(3) and 32(a). The complaint seeks permanent injunctive relief, return of allegedly ill-gotten gains, and civil penalties.
The SEC's investigation was conducted by Stephen Holden and Ming Ming Yang, and supervised by Lee A. Greenwood and Corey Schuster, all of the Enforcement Division's Asset Management Unit, as well as Debra Jaroslawicz, senior trial counsel in the New York Regional Office. The litigation will be led by Ms. Jaroslawicz, Mr. Holden, and Ms. Yang.
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Resources
* SEC Complaint (https://www.sec.gov/files/litigation/complaints/2025/comp-pr2025-55.pdf)
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Original text here: https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26270
SEC Charges New Jersey Investment Adviser and His Firm With Fraud and Other Violations
WASHINGTON, March 18 -- The Securities and Exchange Commission issued the following news release:* * *
SEC Charges New Jersey Investment Adviser and His Firm with Fraud and Other Violations
Defendants disregarded their 2021 settlement and continued their fraud unabated, causing $1.6 million in harm to their fund and the fund's retail investors
Washington D.C., March 17, 2025 -- The Securities and Exchange Commission today announced that it has filed charges against David Yow Shang Chiueh of East Hanover, New Jersey and his investment advisory firm, Upright Financial Corp., for misconduct and ... Show Full Article WASHINGTON, March 18 -- The Securities and Exchange Commission issued the following news release: * * * SEC Charges New Jersey Investment Adviser and His Firm with Fraud and Other Violations Defendants disregarded their 2021 settlement and continued their fraud unabated, causing $1.6 million in harm to their fund and the fund's retail investors Washington D.C., March 17, 2025 -- The Securities and Exchange Commission today announced that it has filed charges against David Yow Shang Chiueh of East Hanover, New Jersey and his investment advisory firm, Upright Financial Corp., for misconduct andfor investing more than 25 percent of Upright Growth Fund's assets in a single company over multiple years, causing losses of $1.6 million.
In November 2021, Chiueh and Upright settled SEC charges that they, as investment advisers to Upright Growth Fund, violated its policy by investing more than 25 percent of its assets in one industry between July 2017 and June 2020, committing fraud and breaching their fiduciary duties. Despite being ordered to stop this conduct, the SEC's complaint alleges, the defendants continued their fraud by violating the 25 percent industry concentration limit and making misrepresentations about it between at least November 24, 2021, and June 23, 2024. As a result, the complaint alleges that the defendants' decision to wait more than two-and-a-half years to sell the relevant stock resulted in losses of approximately $1.6 million to the fund and its investors.
Additionally, the SEC's complaint alleges the defendants engaged in further misconduct during this same period when Chiueh operated the fund's board without the required number of independent trustees and misrepresented the independence of one in filings. The defendants also failed to provide or withheld key information from the board, according to the complaint, and they hired an accountant for the fund without the required vote by the board.
"As alleged, the defendants not only ran the fund contrary to its fundamental investment policies, but they actively misled investors and the fund's board about their conduct," said Corey Schuster, Chief of the Division of Enforcement's Asset Management Unit. "Undeterred by their prior SEC settlement involving these very same issues, we allege that the defendants repeatedly violated fundamental rules designed to protect investors in mutual funds."
The SEC's complaint charges the defendants with violating antifraud and other provisions of the federal securities laws, including provisions of the Investment Advisers Act and Investment Company Act. The complaint seeks permanent injunctive relief, return of allegedly ill-gotten gains, and civil penalties.
The SEC's investigation was conducted by Stephen Holden and Ming Ming Yang, and supervised by Lee A. Greenwood and Mr. Schuster, all of the Enforcement Division's Asset Management Unit, as well as Debra Jaroslawicz, senior trial counsel in the New York Regional Office. The litigation will be led by Ms. Jaroslawicz, Mr. Holden, and Ms. Yang.
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Original text here: https://www.sec.gov/newsroom/press-releases/2025-55
SEC Charges Ex-Public Company CFO With Lying to Auditors and Falsifying Records
WASHINGTON, March 18 -- The Securities and Exchange Commission issued the following litigation release (No. 1:25-cv-02155; S.D.N.Y. filed Mar. 14, 2025) involving Glen Leibowitz:* * *
On March 14, 2025, the Securities and Exchange Commission filed charges against Glen Leibowitz, a New York-licensed CPA and the former chief financial officer (CFO) of Acreage Holdings, Inc., for allegedly lying to Acreage's auditor and falsifying Acreage's accounting records.
According to the SEC's complaint, Leibowitz's violations arise from a round-trip transfer of cash between Acreage and an affiliated entity ... Show Full Article WASHINGTON, March 18 -- The Securities and Exchange Commission issued the following litigation release (No. 1:25-cv-02155; S.D.N.Y. filed Mar. 14, 2025) involving Glen Leibowitz: * * * On March 14, 2025, the Securities and Exchange Commission filed charges against Glen Leibowitz, a New York-licensed CPA and the former chief financial officer (CFO) of Acreage Holdings, Inc., for allegedly lying to Acreage's auditor and falsifying Acreage's accounting records. According to the SEC's complaint, Leibowitz's violations arise from a round-trip transfer of cash between Acreage and an affiliated entitythat temporarily increased Acreage's year-end 2019 cash balance on its internal accounting records. With Leibowitz's alleged knowledge and participation, Acreage caused an affiliated entity to transfer approximately $4.2 million into Acreage's bank account on December 26, 2019, with the express understanding that Acreage would return the exact same amount at the beginning of the new year, which it did on January 3, 2020. The complaint alleges that Leibowitz knew that the round-trip cash transfer had no economic substance or legitimate business purpose and was intended to bolster Acreage's publicly reported year-end cash balance.
The complaint further alleges that Leibowitz was then responsible for Acreage's accounting staff's creation of journal entries that mischaracterized the round-trip transaction, first as a repayment of debt owed by the affiliate and later as a short-term loan from the affiliate to Acreage. After certain employees' concerns about the transaction were escalated to a member of Acreage's board of directors, Leibowitz allegedly directed Acreage's accounting staff to record an additional journal entry that effectively reversed the transaction. The complaint also alleges that during the audit of Acreage's fiscal year 2019 financial statements, Leibowitz misrepresented and omitted material facts about the round-trip cash transfer in written and oral statements he made to the accounting firm conducting the audit, including in Acreage's management representation letter.
The SEC's complaint, filed in the United States District Court for the Southern District of New York, charges Leibowitz with violating Section 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 13b2-1 and 13b2-2 thereunder, and with aiding and abetting Acreage's violations of Section 13(b)(2)(A) of the Exchange Act. The complaint seeks permanent injunctive relief, civil monetary penalties and a conduct-based injunction.
The SEC's investigation was conducted by Kiran Patel, Nandy Celamy, Jessica Quinn, Rusty Feldman and George N. Stepaniuk and was supervised by Thomas P. Smith, Jr., all of the SEC's New York Regional Office. The litigation will be led by Mr. Feldman and Mr. Patel and supervised by Daniel Loss. The litigation will be led by Mr. Feldman and Mr. Patel and supervised by Daniel Loss.
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Resources
* SEC Complaint (https://www.sec.gov/files/litigation/complaints/2025/comp26271.pdf)
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Original text here: https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26271
SEC Chair Uyeda Issues Remarks to the Investment Company Institute's 2025 Investment Management Conference
WASHINGTON, March 18 -- The Securities and Exchange Commission issued the following remarks by Mark T. Uyeda, Acting Chairman:* * *
Remarks to the Investment Company Institute's 2025 Investment Management Conference
Mark T. Uyeda, Acting Chairman
I. Introduction
Thank you, Paul [Cellupica], for the thoughtful introduction and I appreciate the invitation to address the ICI's 2025 Investment Management Conference. First, I'd like to congratulate Dorothy Donohue on her well-earned retirement. Dorothy has had an impressive career spanning both public and private service, with a deep knowledge ... Show Full Article WASHINGTON, March 18 -- The Securities and Exchange Commission issued the following remarks by Mark T. Uyeda, Acting Chairman: * * * Remarks to the Investment Company Institute's 2025 Investment Management Conference Mark T. Uyeda, Acting Chairman I. Introduction Thank you, Paul [Cellupica], for the thoughtful introduction and I appreciate the invitation to address the ICI's 2025 Investment Management Conference. First, I'd like to congratulate Dorothy Donohue on her well-earned retirement. Dorothy has had an impressive career spanning both public and private service, with a deep knowledgeof the fund industry and its legal framework. I have worked with her on many issues over the years. She will be missed, and I wish her well on her next chapter.
This year - 2025 - marks the start of a new presidential administration, which holds tremendous potential. It has been a privilege to serve these past couple of months as the Acting Chairman of the Securities and Exchange Commission.[1]
This year also marks a personal milestone - my thirtieth year of legal practice, which started out as a first-year associate in the '40 Act practice of a major law firm. The practice was led by Richard "Dick" Phillips, one of the legends of the securities bar and, equally important, a former member of the SEC staff. Dick served the Commission during the 1960s in several capacities, including assistant to the chairman, assistant general counsel, and staff director of the SEC Corporate Disclosure and Investment Company Studies.
During that time, I learned a few things. First, I could distinguish between an open-end and a closed-end fund. And second, I learned to have a lot of respect for the SEC staff.
Thus, I jumped at the opportunity to join the staff in 2006. Since then, I have had many roles at the Commission, both as part of the executive staff and in the Division of Investment Management. I have been detailed to work on issues related to funds and asset managers at the Department of the Treasury, the Department of Labor, and the Senate Banking Committee. These experiences, and the terrific people with whom I have worked in public service, have contributed to how I now oversee and manage the Commission as acting Chairman during this transition period.
I am pleased to share my perspective today on my views as to the Commission's upcoming work.
II. A Blueprint for SEC Rulemaking Processes
A core responsibility held by each SEC commissioner is the power to vote on how the agency should exercise its authority granted by the federal securities laws. Some of these votes are on the Commission's various rule proposals and adoptions that govern market participants.
My roles as counsel to multiple commissioners, as well as being a rule-writer on the staff in the Division of Investment Management, have given me a unique view into all aspects of the rulemaking process. Rulemaking, when properly conducted, is not an easy task. But the legal and policy changes implemented through rulemaking can have profound effects on investors and the markets. It was a particular privilege to lead the rulemaking team that finalized the mutual fund summary prospectus rule in 2009. I saw first-hand the importance of a robust and informed rulemaking process in producing practical rules that serve the Commission's mission. Not to mention, of course, that this process is required by law.[2]
During the past four years, however, I have expressed my concern about the changes to the Commission's rulemaking processes - which were not for the better.[3] I have described these changes as "rulemaking shortcuts," often taken in the name of expediency. Unfortunately, these shortcuts have returned to haunt the Commission in subsequent litigation. One of my objectives will be to set forth a blueprint for restoring the Commission's rulemaking processes to the "gold standard" among regulatory agencies.
Meaningful Engagement with Stakeholders
The blueprint should start with restoring historical rulemaking comment periods. Recognizing the need for safeguards on federal agencies' rulemaking authority, Congress enacted the Administrative Procedure Act.[4] Many of you are familiar with the "notice and comment" approach to rulemaking that is a key procedural requirement of that Act. An agency generally must publish a notice in the Federal Register and provide the public the opportunity to comment on the proposal. The notice requirement must "afford[] interested persons a reasonable and meaningful opportunity to participate in the rulemaking process."[5] The Act does not provide a minimum period to receive comments on rule proposals.[6] But, a comment period of at least 60 days has been endorsed by the Administrative Conference of the United States for significant regulatory actions.[7] Further, executive orders issued by multiple past presidents from both political parties have all recognized the importance of a minimum 60-day comment period.[8]
During the past four years, a significant number of proposals had comment periods shorter than 60 days--45-day, and even 30-day, comment periods were the norm. This represented a notable shift from the Commission rulemaking process, which generally had 60-day comment periods, or even 90-day comment period for more complex rulemakings.[9] This represented a significant deviation from everything that I had been taught about rulemaking as a member of the staff in my nineteen years with the Commission.
Providing thoughtful comments on rule proposals is even more challenging when the rule proposal is dense and the scope of the rulemaking is over-broad. It is nearly impossible when the Commission asks for public comment on multiple proposals affecting the same stakeholders at the same time. I was concerned to see this dynamic in considering the Commission's 2022 proposal on open-end fund liquidity and swing pricing.[10] The scope of this proposal covered not only amendments to the 2016 liquidity risk management rule for funds, but went significantly further. Notably, it also proposed substantial changes to fund reporting requirements, mandatory swing pricing for funds, and a 4:00 pm "hard close" requirement. Commenters focused significantly on the swing pricing and hard close requirements, which would have fundamentally altered the way that open-end funds operate. The Commission later adopted only a subset of the proposal--the changes to Form N-PORT and N-CEN reporting requirements--without much public comment on those specific aspects to help us weigh the costs and benefits.[11]
There is a tool at the Commission's disposal that could have been used when confronted with a comment file revealing the need for additional input. Indeed, the Commission has used this tool to great success in the past, although rarely in recent years.[12] This tool is the practice of re-proposing rules where appropriate, or in certain circumstances, re-opening the comment file for a rule proposal. Re-proposing rules has the benefit of taking into account issues that commenters have raised in iterating on the prior rule proposal. It also can respond to changed conditions in the markets. Re-proposal is also appropriate when significant time has passed since the original proposal.[13] While it is unlikely that every aspect of a Commission rulemaking proposal will be deemed perfect by commenters, some proposals generate comments that may affect important parts of the proposal. Thus, when significant changes to a proposal is contemplated, the Commission would be well-served to make use of re-proposals to focus attention on those changes.
A Framework for Getting "Back to Basics" on Rulemaking Processes
The Commission's blueprint should include some "back to basics" steps to help ensure that each rulemaking proposal is as well-reasoned as possible. All Commission rulemaking actions should begin with an identification of the rule's purpose. What problem is the Commission trying to solve, and is it squarely within its statutory authority to engage in rulemaking to solve that problem?
Public engagement is often important in determining if there is a problem to solve in the first place, and if so, the range of potential solutions. The simplest form of engagement is a meeting between stakeholders and the staff or Commissioners. Under this Administration, the Commission's doors are open, and we are ready to have a productive dialogue. Some topics benefit from stakeholders having the opportunity to engage not just with us, but with each other. For these, public roundtables can be good options. Requests for information, concept releases, and advance notices of proposed rulemaking are additional means for obtaining feedback. These can help shape proposals, including by soliciting particular data to inform our efforts. Finally, investor testing can be particularly helpful in assessing disclosure effectiveness.[14] As a sidebar on disclosure--and to build on a key lesson from investor testing--one area I would like to explore is how funds can trim their summary prospectuses to the 3-4 pages the Commission originally envisioned, from the bloated 12-15 pages often seen today.[15]
Once the problem has been identified, there are two additional steps in our decision-making. First, is the proposed regulation likely to be effective or ineffective? Second, is the proposed regulation likely to be costly or not costly? We should strive for regulations that are both effective and not costly. Engagement with our stakeholders, as well as a robust comment period, help the Commission and staff experts weigh the question of whether a proposal will likely be effective.
A proper economic analysis will help us distinguish between approaches that are effective and efficient, versus those that are effective but costly. The Commission is required by statute to consider efficiency, competition, and capital formation in its rulemaking.[16] Our Division of Economic and Risk Analysis has developed robust procedures that build on this statutory mandate, recognizing that high-quality economic analysis is an essential part of our rulemaking.[17]
In my view, there remain areas where we could update these procedures to improve our assessment of rules' economic impacts. Compliance, attorney, and other professional costs evolve substantially over time, and our staff is currently refining processes for ensuring that our estimates of these burden inputs are as up-to-date as possible. Another area where we could improve our burden analysis is how we think about rules' impacts on small entities. The definitions our rules use for small funds and advisers were last updated over 25 years ago.[18] We are statutorily required to consider our regulations' impact on small entities--but when our rules define only a tiny fraction of firms as "small," I question how meaningful this consideration can be.[19] There are not many fund complexes with net assets of $50 million or less[20] and it would seem strange to treat a $60 million fund complex the same as an $11.6 trillion fund complex. I have asked the staff to develop recommendations on amending the small entity definitions, and I look forward to considering these.
Further Policy Development-- Where Do We Go From Here?
The Commission's blueprint needs to prioritize effective and cost-efficient regulations that respect the limits of our statutory authority. We must be clear-eyed about how existing proposals fare under this rubric. Using this framework for analysis, the Commission could consider options that include withdrawing or re-proposing existing rule proposals. My concerns with some existing rule proposals, including those addressing the safeguarding of advisory client assets, outsourcing by investment advisers, ESG disclosures for funds and advisers, and digital engagement practices, are a matter of public record.[21] With respect to the safeguarding proposal, commenters expressed significant concern with the broad scope of the proposed safeguarding rule for investment advisers, which would extend the custodial requirements to virtually any asset, including crypto.[22] Given such concern, there may be significant challenges to proceeding with the original proposal. As such, I have asked the SEC staff to work closely with the crypto task force to consider appropriate alternatives, including its withdrawal.
In terms of recently-adopted rules, consideration should be given as to whether changed circumstances weigh in favor of taking a pause. We are reviewing and considering further action on whether certain rules that the Commission has adopted, but which are not yet effective, is appropriate. Some of these rules have been challenged in court. As one example, I have directed the staff to develop recommendations on re-proposing certain aspects of the recently-adopted Form N-PORT reporting requirements.[23] Additional input could help us consider if we struck the right balance or if there is new information in the time since commenters last weighed in that could inform a reconsideration. For instance, commenters raised concerns about more-frequent public disclosure of funds' portfolio holdings. Among other issues, are these concerns heightened by continuing advances in artificial intelligence?
We also could consider extending or delaying the compliance dates for recently-adopted rules. This can assist firms by providing additional time to implement new rules in an orderly manner, when we become aware of challenges associated with the timing of the initial compliance dates. We used this approach earlier this year in the context of Form PF amendments[24] and then, last Friday, for fund names.[25] The staff is also considering recommending that the Commission extend the effective date for the recent amendments to Form N-PORT.
Turning to future rulemaking, the Commission should act like a super-sized freighter, not a speed boat - and that means returning to a smoother regulatory course than the rapid changes that have been promulgated over the last four years. Investors and the industry must be able to rely on us to act consistent with precedent and through an informed and thorough public process. Above all, we should be guided by our three-part mission: to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
III. Capital Raising and Investor Protection: Two Sides of the Same Coin
Just as our capital formation efforts lead to benefits for investors, the Commission's investor protection role is crucial to facilitating the growth of capital markets. Simply put, investors who believe that our markets are rife with fraud will not invest. Our Division of Enforcement has a crucial mission to root out fraudulent actors from our markets and to take remedial action against market participants who do not abide by the statutes and regulations in place.
However, enforcement is not the sole tool of the Commission in order to achieve regulatory compliance. When there are areas where we observe compliance inconsistencies, we should remind firms of their obligations in order to flag common issues and, in the case of new requirements, ensure a smooth transition. The recent Accounting and Disclosure Information publication, or "ADI," issued by staff in the Division of Investment Management this January provides an example of one way that we can do this effectively.[26] The Commission has adopted a number of rules that rely on the use of layered disclosure principles, requiring funds to deliver certain concise, investor-friendly information directly, with additional detail available online for those investors who want more information.[27]
The ADI publication was based on a staff review of current website posting practices under these rules and others that require information to appear online, including our summary prospectus rules and rules for funds operating as exchange-traded funds. The staff review found some common instances of non-compliance with the associated rules. For example, funds using a summary prospectus failed to include website addresses on the covers of their summary prospectuses indicating where the required online documents resided, and failed to include required hyperlinking within and between posted documents. And a number of ETFs did not include the information required by rule 6c-11 under the Investment Company Act of 1940, such as historic premium and discount information. If we are to continue to move forward in an increasingly digital world, compliance with basic posting requirements is essential.
We should also periodically consider whether our Enforcement resources are being appropriately deployed in keeping with our investor protection mandate. I am particularly concerned about fraud targeting seniors. These individuals are relatively more likely to have amassed wealth over time, and they can be easy targets for financial abuse. Protecting seniors is a priority of the Commission, and this work ranges from enforcement, public education and outreach, and the development of regulatory policy.[28] The Commission has historically held "senior summits" in coordination with state securities regulators, FINRA, and others. These were paused following the financial crisis in 2008. Nearly 17 years later, the time is past due to reconvene these or similar events. Much has changed during this period--for example, senior fraud has become highly technological, reflecting seniors' embrace of smart phones and social media. We need to take these developments into account in focusing on how seniors can safely prepare for their golden years.
IV. Facilitating Innovation and Retirement Savings
Finally, this brings me to the next theme I'd like to explore--how can we be more flexible in our regulatory approach to facilitate appropriate innovation? As an agency we should be asking, how can this innovation best serve the interests of American investors, and how can innovation help meet the particular challenges these investors face today?
The last four years have been marked by an inflexible approach to innovation. We are not merit regulators. Not all products will succeed, but that does not make them inappropriate. As an example, the ETF market has grown enormously in the last 20 years, covering everything from broad market indexes to niche sectors and alternative asset classes. However, for every three ETFs launched in the last ten years, one has shut down.[29] In my view, this doesn't reveal a general concern about ETFs as a product. Instead, this shows the natural process of experimentation, and market forces of supply and demand at play.
I keep this in mind as an example of the truly exciting things we can accomplish for investors if we embrace product innovation. While this innovation can be facilitated through rulemaking, I would be remiss not to mention another path for experimentation--the exemptive application process. We view this process as a laboratory where we can review new ideas from market participants. This gives the opportunity to consider the benefits of new products, as well as potential risks to investors and the market.
You will recall that ETFs started through the exemptive application process, and eventually the Commission codified certain conditions for ETFs to operate without obtaining an exemptive order.[30] ETFs now account for approximately 30% of total net assets that investment companies manage.[31] One innovation may be funds offering both mutual fund and ETF share classes. More than two years have passed since the most recent set of exemptive applications for ETF share class relief was filed. I have directed the Commission staff to prioritize their careful review of the many applications filed for this relief, and I look forward to considering their recommendations.
One challenge for the fund industry to explore is how products can be developed that help Americans who have saved in IRAs and 401(k)s successfully manage their finances in retirement. Americans have a significant fear of running out of money. However, they should also be able to use their savings to enjoy their retirement years. Even if a worker has theoretically saved enough for a comfortable retirement, how can he or she be sure that the family's nest egg is not drawn down too soon, or too quickly?
This complex problem requires not only the best innovative minds in the industry to develop financial products that meet this need, but also collaboration between the SEC, Department of Labor, and state insurance regulators. We should be committed to coordinating closely with these parties as we consider the needs of investors and their retirement investments. During the first Trump Administration, there was a close relationship between the SEC and the Department of Labor on retirement security issues. I have already reached out to the new leadership at DOL and hope that we can have a similar relationship.
V. Conclusion
To conclude my remarks - a lot of which have been focused on SEC rulemaking - I am reminded of the Navy SEALs, who train a few miles away from here in the surf off Coronado. The SEALs have a saying, "slow is smooth and smooth is fast," which is a reminder to take the time to do things carefully and methodically, rather than rush and risk actions that are not fully thought through. The same can be said for agency rulemaking and minimizing our risk to future litigation challenge.
Thank you for your attention and I would like to invite you to discuss any of these points with me and my staff. I would be remiss if I did not take the opportunity to thank the hardworking staff of the Commission who are dedicated to fulfilling our mission. As an SEC employee for nearly 19 years, I continue to be inspired by their diligence and professionalism. Thank you and enjoy your conference.
[1] These remarks reflect my individual views as Acting Chairman at the U.S. Securities and Exchange Commission and do not necessarily reflect the views of the full Commission or my fellow Commissioners.
[2] Administrative Procedure Act, 5 U.S.C. Sec. 553.
[3] See Mark T. Uyeda, Remarks at the SEC Speaks Conference 2022 (Sept. 9, 2022), available at https://www.sec.gov/newsroom/speeches-statements/uyeda-speech-sec-speaks-090922.
[4] Id.
[5] See, e.g., Forester v. CPSC, 559 F.2d 774, 787 (D.C. Cir. 1977).
[6] In assessing whether an agency's requirement to accept comments on the rule proposals has been satisfied, courts will look to whether an agency has provided an "adequate" period to comment. See N.C. Growers' Ass'n v. UFW, 702 F.3d 755, 770 (4th Cir. 2012).
[7] See Administrative Conference of the United States, Rulemaking Comments, Recommendation No. 2011-2 (June 16, 2011), available at https://www.acus.gov/recommendation/rulemaking-comments.
[8] Executive Order 13563, Improving Regulation and Regulatory Review (Jan. 18, 2011) [76 Fed. Reg. 3821 (Jan. 21, 2011)]; see also Executive Order 12866, Regulatory Planning and Review (Sept. 30, 1993) [58 Fed. Reg. 51735 (Oct. 4, 1993)] ("each agency should afford the public a meaningful opportunity to comment on any proposed regulation, which in most cases should include a comment period of not less than 60 days"); Memorandum for the Heads of Executive Departments and Agencies, Modernizing Regulatory Review (Jan. 20, 2021) [86 Fed. Reg. 7223 (Jan. 26, 2021)] ("This memorandum reaffirms the basic principles set forth in [Executive Order 12866] and in Executive Order 13563 of January 18, 2011 (Improving Regulation and Regulatory Review), which took important steps towards modernizing the regulatory review process. When carried out properly, that process can help to advance regulatory policies that improve the lives of the American people.").
[9] See Jennifer J. Schulp and Nicholas Anthony, Cato Institute, "The SEC Short-Changes Public Comment" (Jan. 14, 2022), available at https://www.cato.org/blog/sec-short-changes-public-comment.
[10] Open-End Liquidity Risk Management Programs and Swing Pricing; Form N-PORT Reporting, Investment Company Act Release No. 34746 (Nov. 2, 2022) [87 FR 77172 (Dec. 16, 2022)], available at https://www.sec.gov/files/rules/proposed/2022/33-11130.pdf.
[11] Form N-PORT and Form N-CEN Reporting; Guidance on Open-End Fund Liquidity Risk Management Programs; Investment Company Act Release No. 35308 (Aug. 28, 2024), available at https://www.sec.gov/files/rules/final/2024/ic-35308.pdf. See Mark T. Uyeda, Statement on Form N-PORT and Form N-CEN Reporting Amendments; Guidance on Open-End Liquidity Risk Management Programs (Aug. 28, 2024), available at https://www.sec.gov/newsroom/speeches-statements/uyeda-statement-form-n-port-amendments-082824; and Hester M. Peirce, Too Short to Report: Statement on Form N-PORT and Form N-CEN Reporting Amendments; Guidance on Open-End Liquidity Risk Management Programs (Aug. 28, 2024), available at https://www.sec.gov/newsroom/speeches-statements/peirce-statement-form-n-port-amendments-082824.
[12] The Commission's 2019 re-proposal of derivatives risk management rules for funds is an example of a proposal that benefitted from additional commenter input. See Use of Derivatives by Registered Investment Companies and Business Development Companies; Required Due Diligence by Broker-Dealers and Registered Investment Advisers Regarding Retail Customers' Transactions in Certain Leveraged/Inverse Investment Vehicles, Investment Company Act Release No. 33704 (Nov. 25, 2019) [85 FR 4446 (Jan. 24, 2020)], available at https://www.sec.gov/files/rules/proposed/2019/34-87607.pdf. On the other hand, in my view the Commission should have re-proposed the pay versus performance rule that the Commission adopted in 2022. See Mark T. Uyeda, Remarks at the Practicing Law Institute's 55th Annual Institute on Securities Regulation (Nov. 7, 2023), available at https://www.sec.gov/newsroom/speeches-statements/uyeda-remarks-practicing-law-institute-110723.
[13] The Commission staff's practice has been generally to recommend re-proposing a rule if more than five years have elapsed since the original proposal.
[14] Section 912 of the Dodd-Frank Act Wall Street Reform and Consumer Protection Act authorizes the Commission to engage in investor testing programs for the purpose of evaluating any of its rules or programs. See Pub. L. No. 111-203, 124 Stat. 1376 (2010).
[15] See Enhanced Disclosure and New Prospectus Delivery Option for Registered Open-End Management Investment Companies, Investment Company Act Release No. 28584 (Jan. 13, 2009) [74 FR 4545 (Jan. 26, 2009)], available at https://www.sec.gov/files/rules/final/2009/33-8998.pdf ("2009 Summary Prospectus Adopting Release").
[16] Statutory provisions added by the National Securities Market Improvement Act of 1996 and the Gramm-Leach-Bliley Act of 1999 to the 1933, 1934, and 1940 Acts--which require the Commission to consider efficiency, competition, and capital formation whenever it is "engaged in rulemaking and is required to consider or determine whether an action is necessary or appropriate in the public interest"--expressly call for consideration of several broad economic issues in addition to the protection of investors.
[17] See Memorandum from the Division of Risk, Strategy, and Financial Innovation and the Office of the General Counsel to Staff of the Rulewriting Divisions and Offices (Mar. 16, 2012), available at https://www.sec.gov/divisions/riskfin/rsfi_guidance_econ_analy_secrulemaking.pdf.
[18] Definitions of "Small Business" or "Small Organization" Under the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Securities Exchange Act of 1934, and the Securities Act of 1933, Investment Company Act Release No. 23272, 63 Fed. Reg. 35508 (June 30, 1998), available at https://www.govinfo.gov/content/pkg/FR-1998-06-30/pdf/98-17387.pdf.
[19] See Regulatory Flexibility Act, Pub. L. No. 96-354, 94 Stat. 1164 (codified at 5 U.S.C. Sec. 601).
[20] See 17 CFR 270.0-10.
[21] See Mark T. Uyeda, Statement on the Proposals re: Conflicts of Interest Associated with the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers (July 26, 2023), available at https://www.sec.gov/newsroom/speeches-statements/uyeda-statement-predictive-data-analytics-072623; Mark T. Uyeda, Statement on Proposed Rule Regarding the Safeguarding of Advisory Client Assets (Feb. 15, 2023), available at https://www.sec.gov/newsroom/speeches-statements/uyeda-statement-custody-021523; Mark T. Uyeda, Remarks at the California '40 Acts Group (Jan. 27, 2023), available at https://www.sec.gov/newsroom/speeches-statements/uyeda-remarks-california-40-acts-group; Mark T. Uyeda, Statement on Proposed Rule Regarding Outsourcing by Investment Advisers (Oct. 26, 2022), available at https://www.sec.gov/newsroom/speeches-statements/uyeda-statement-service-providers-oversight-102622.
[22] See Safeguarding Advisory Client Assets, Investment Advisers Release No. 6249 (Feb. 15, 2023) [88 FR 14672 (Mar. 9, 2023)], available at https://www.sec.gov/rules/proposed/2023/ia-6240.pdf.
[23] See Letter to Mark T. Uyeda, Acting Chairman, Securities and Exchange Commission, submitted by the Investment Company Institute (Feb. 26, 2025), available at https://www.ici.org/system/files/2025-02/25-cl-form%20nport-amendments.pdf.
[24] Form PF; Reporting Requirements for All Filers and Large Hedge Fund Advisers; Extension of Compliance Date, Investment Advisers Act Release No. 6838 (Jan. 29, 2025) [90 FR 9007 (Feb. 5, 2025)], available at https://www.sec.gov/files/rules/final/2025/ia-6838.pdf.
[25] Investment Company Names; Extension of Compliance Date, Investment Company Act Release No. 35500 (Mar. 14, 2025), available at https://www.sec.gov/files/rules/final/2025/33-11368.pdf.
[26] Division of Investment Management, Accounting and Disclosure Information 2025-15, Website Posting Requirements (Jan. 16, 2025), available at https://www.sec.gov/about/divisions-offices/division-investment-management/accounting-disclosure-information/adi-2025-15-website-posting-requirements; see also Division of Investment Management, Accounting and Disclosure Information 2024-14, Tailored Shareholder Report Common Issues (Nov. 8, 2024), available at https://www.sec.gov/about/divisions-offices/division-investment-management/accounting-disclosure-information/adi-2024-14-tailored-shareholder-report-common-issues (addressing instances where staff observed recurring issues relating to requirements to make certain information available online, as required under rule 30e-1 under the Investment Company Act).
[27] See, e.g., 2009 Summary Prospectus Adopting Release, supra footnote 15; Updated Disclosure Requirements and Summary Prospectus for Variable Annuity and Variable Life Insurance Contracts, Investment Company Act Release No. 33814 (Mar. 11, 2020) [85 FR 25964 (May 1, 2020)], available at https://www.sec.gov/rules/final/2020/33-10765.pdf; Registration for Index-Linked Annuities and Registered Market Value Adjustment Annuities; Amendments to Form N-4 for Index-Linked Annuities, Registered Market Value Adjustment Annuities, and Variable Annuities; Other Technical Amendments, Investment Company Act Release No. 35273 (July 1, 2024) [89 FR 59978 (July 24, 2024)], available at https://www.sec.gov/files/rules/final/2024/33-11294.pdf.
[28] See, e.g., Mario E. Rivero, Litigation Release No. 25986 (Apr. 29, 2024), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-25986; John A. Masanotti, Jr. and Middlesex Mortgage Group, LLC, Litigation Release No. 25891 (Nov. 9, 2023), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-25891; Julie Anne Darrah, et al., Litigation Release No. 25885 (Oct. 25, 2023), available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-25885; see also Office of Investor Education and Advocacy, Resources for Older Investors, available at https://www.investor.gov/additional-resources/information/older-investors. The Commission also has recently approved FINRA rules relating to the financial exploitation of seniors. See Financial Industry Regulatory Authority, Inc.; Order Approving a Proposed Rule Change to Amend Rule 2165 (Financial Exploitation of Specified Adults), Exchange Act Release No. 94061 (Jan. 25, 2022) [87 FR 4974 (Jan. 31, 2022)].
[29] Staff analysis of Morningstar data through December 2024.
[30] 17 CFR 270.6c-11.
[31] Division of Investment Management (Analytics Office), Registered Fund Statistics (Feb. 4, 2025) at Table 2.3, available at https://www.sec.gov/files/investment/im-registered-fund-statistics-20250204.pdf.
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Original text here: https://www.sec.gov/newsroom/speeches-statements/uyeda-ici-031725
FMC Launching Examination of Global Maritime Chokepoints
WASHINGTON, March 18 -- The Federal Maritime Commission issued the following news release:* * *
FMC Launching Examination of Global Maritime Chokepoints
The Federal Maritime Commission is gathering information about seven international maritime chokepoints to identify any regulations, policies, or practices that create unfavorable shipping conditions.
The seven chokepoints being examined are: the Northern Sea Passage, the English Channel, the Malacca Strait, the Singapore Strait, the Strait of Gibraltar, the Panama Canal, and the Suez Canal.
The review is initiated with an opportunity for ... Show Full Article WASHINGTON, March 18 -- The Federal Maritime Commission issued the following news release: * * * FMC Launching Examination of Global Maritime Chokepoints The Federal Maritime Commission is gathering information about seven international maritime chokepoints to identify any regulations, policies, or practices that create unfavorable shipping conditions. The seven chokepoints being examined are: the Northern Sea Passage, the English Channel, the Malacca Strait, the Singapore Strait, the Strait of Gibraltar, the Panama Canal, and the Suez Canal. The review is initiated with an opportunity forpublic participation through a 60-day comment period. The Commission is specifically interested in responses from foreign governments, container shipping companies, vessel owners, bulk cargo operators, and tramp operators to six specific questions listed in the Federal Register notice announcing this action.
The Commission initiated this action using authorities found at 46 U.S.C. Sec. 42101 and 46 C.F.R. Sec. 502.281 and 502.282.
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Original text here: https://www.fmc.gov/articles/fmc-launching-examination-of-global-maritime-chokepoints/
EEOC Acting Chair Andrea Lucas Sends Letters to 20 Law Firms Requesting Information About DEI-Related Employment Practices
WASHINGTON, March 18 -- The Equal Employment Opportunity Commission issued the following news release on March 17, 2025:* * *
EEOC Acting Chair Andrea Lucas Sends Letters to 20 Law Firms Requesting Information About DEI-Related Employment Practices
WASHINGTON - Today, U.S. Equal Employment Opportunity Commission (EEOC) Acting Chair Andrea Lucas sent letters to 20 law firms requesting information about their diversity, equity and inclusion (DEI) related employment practices.
Based on publicly available information, the letters note concerns that some firms' employment practices, including ... Show Full Article WASHINGTON, March 18 -- The Equal Employment Opportunity Commission issued the following news release on March 17, 2025: * * * EEOC Acting Chair Andrea Lucas Sends Letters to 20 Law Firms Requesting Information About DEI-Related Employment Practices WASHINGTON - Today, U.S. Equal Employment Opportunity Commission (EEOC) Acting Chair Andrea Lucas sent letters to 20 law firms requesting information about their diversity, equity and inclusion (DEI) related employment practices. Based on publicly available information, the letters note concerns that some firms' employment practices, includingthose labeled or framed as DEI, may entail unlawful disparate treatment in terms, conditions, and privileges of employment, or unlawful limiting, segregating, and classifying based on race, sex, or other protected characteristics, in violation of Title VII of the Civil Rights Act of 1964 (Title VII).
"The EEOC is prepared to root out discrimination anywhere it may rear its head, including in our nation's elite law firms," Lucas said. "No one is above the law--and certainly not the private bar."
Title VII prohibits an employer from discriminating against an individual because of race, color, religion, sex, or national origin. Under Title VII, an employer initiative, policy, program, or practice may be unlawful if it involves an employer taking an employment action motivated--in whole or in part--by race, sex, or another protected characteristic.
Title VII also bars employers from limiting, segregating, or classifying employees based on race, sex, or other protected characteristics in a way that affects their status or deprives them of employment opportunities, including in voluntary employee groups and activities which are employer sponsored. There is no "diversity" exception to these prohibitions. It is the responsibility of the EEOC to enforce the provisions of Title VII with respect to businesses and other private sector employers.
The law firms that received letters from Acting Chair Lucas include:
1. A & O Shearman
2. Debevoise & Plimpton LLP
3. Cooley LLP
4. Freshfields Bruckhaus Deringer LLP
5. Goodwin Procter LLP
6. Hogan Lovells LLP
7. Kirkland & Ellis LLP
8. Latham & Watkins LLP
9. McDermott Will & Emery
10. Milbank LLP
11. Morgan, Lewis & Bockius LLP
12. Morrison & Foerster LLP
13. Perkins Coie
14. Reed Smith
15. Ropes & Gray LLP
16. Sidley Austin LLP
17. Simpson Thacher & Bartlett LLP
18. Skadden, Arps, Slate, Meagher & Flom LLP
19. White & Case LLP
20. WilmerHale
You can read the letters here: https://www.eeoc.gov/sites/default/files/2025-03/Law_Firm_Letters_-_03.17.2025.pdf
The EEOC has established an email where whistleblowers can submit information to the EEOC about potentially unlawful DEI practices at law firms: lawfirmDEI@eeoc.gov. Whistleblowers should be aware that emailing allegations of unlawful discrimination, harassment, or retaliation to the lawfirmDEI@eeoc.gov email address, does not constitute filing a charge of discrimination. If you suspect you have experienced or witnessed DEI-related discrimination at a law firm, and you wish to file a charge of discrimination, contact the EEOC promptly because there are strict time limits for filing a charge--you can learn more about the process to file a charge at https://www.eeoc.gov/filing-charge-discrimination.
Information obtained from individuals who contact the EEOC is confidential and will not be revealed to the employer until the individual files a charge of discrimination. Your employer may not fire, demote, harass, or otherwise retaliate against you for filing a charge or cooperating with the EEOC. The laws the EEOC enforces make it illegal for an employer to retaliate against someone who files a charge or someone who takes part in an EEOC process, investigation, or lawsuit.
The EEOC is the federal agency authorized to investigate and litigate against private companies and other private employers for violations of Title VII and other federal laws prohibiting employment discrimination. For public employers, the EEOC shares jurisdiction with the Department of Justice's Civil Rights Division; the EEOC is responsible for investigating public sector charges before referring them to DOJ for potential litigation. The EEOC also is responsible for coordinating the federal government's employment antidiscrimination effort. More information about the EEOC is available at www.eeoc.gov. Stay connected with the latest EEOC news by subscribing to our email updates.
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Original text here: https://www.eeoc.gov/newsroom/eeoc-acting-chair-andrea-lucas-sends-letters-20-law-firms-requesting-information-about-dei