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Matthew Orso

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Matt is a skilled advocate for clients subject to regulatory oversight, including financial services companies. He provides guidance by developing informed strategies for investigations, enforcement matters, compliance, and litigation.

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On September 23, Principal Deputy Assistant Attorney General Nicole M. Argentieri announced that the U.S. Department of Justice (DOJ) updated its guidance on the Evaluation of Corporate Compliance Programs (ECCP). The DOJ’s ECCP serves as a roadmap for federal prosecutors to use when evaluating the effectiveness of corporate compliance programs. Therefore, companies should also pay close attention to this guidance when reviewing their compliance programs. Ultimately, a company’s efforts to design, regularly evaluate, and update its compliance program in line with this guidance could inform criminal investigations, charging decisions, and case resolutions.

As discussed here, on June 28, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) proposed significant amendments to the anti-money laundering and countering the financing of terrorism (AML/CFT) program requirements for financial institutions subject to the Bank Secrecy Act (BSA). Last week, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (collectively, the agencies) issued a joint statement announcing their own notice of proposed rulemaking for their supervised institutions. The purpose of the proposed rulemaking is to align the agencies’ respective AML/CFT program rules with FinCEN’s proposed revisions, ensuring a unified standard for compliance.

On June 28, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced a proposed rule aimed at strengthening and modernizing financial institutions’ anti-money laundering and countering the financing of terrorism (AML/CFT) programs. The Treasury’s priority is to promote a more effective risk-based regulatory regime that directs financial institutions to focus their AML/CFT programs on the highest priority threats.

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) recently announced a Notice of Proposed Rulemaking (NPRM) aimed at keeping bad actors from exploiting the U.S. financial system and assets through investment advisers. Specifically, it would require certain investment advisers to apply Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) requirements pursuant to the Bank Secrecy Act (BSA), including implementing risk-based AML/CFT programs, reporting suspicious activity to FinCEN, and fulfilling recordkeeping requirements such as those relating to the transmittal of funds (i.e., comply with the Recordkeeping and Travel Rule). FinCEN is proposing to delegate its examination authority to the SEC.

As reported in more detail on our Regulatory Oversight blog, the Securities and Exchange Commission’s Division of Examinations recently released its 2024 Examination Priorities report. The report underscores the SEC’s intent to focus on risk areas impacting market participants, particularly those related to cryptocurrency and emerging technology.

On October 19, the Securities and Exchange Commission (SEC) dismissed its claims against Ripple Labs, Inc. (Ripple) executives Bradley Garlinghouse and Christian Larsen for allegedly aiding and abetting Ripple’s violations of the Securities Act with respect to its “institutional sales” of XRP. The Southern District of New York had deemed “institutional sales” to be unregistered securities in its July summary judgment decision, however, at that time the court reserved judgment as to the aiding and abetting claims against the executives. The matter was set for trial in 2024.

On September 8, the Financial Crimes Enforcement Network of the U.S. Department of Treasury (FinCEN) issued an alert warning financial institutions to be vigilant against a prominent virtual currency investment scam called “pig butchering.” U.S. law enforcement currently estimates victims in the United States have lost billions of dollars to these types of scams.

In the realm of financial crime prevention, the adoption of generative artificial intelligence (AI) technologies has the potential to revolutionize Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) compliance. AI offers powerful tools for detecting suspicious activities, identifying patterns, and streamlining compliance processes. However, as with any transformative technology, there are both benefits and risks associated with its use. Here, we summarize key uses and risks of AI in BSA/AML compliance, shedding light on the opportunities and challenges that lie ahead in this critical area of financial regulation.

Yesterday, Coinbase Financial Markets, Inc., a leading cryptocurrency exchange, announced that it has secured regulatory approval from the National Futures Association (NFA) to operate a futures commission merchant offering crypto futures on its platforms. The NFA is the self-regulatory organization for the U.S. derivatives industry, designated by the Commodity Futures Trading Commission (CFTC). According to Coinbase, its application has been pending since 2021.

On August 9, the Securities and Exchange Commission (SEC) sent a letter to U.S. District Judge Analisa Torres requesting leave to file an interlocutory appeal in SEC v. Ripple Labs, Inc. as to the two adverse liability determinations in her July 13, 2023 order. That order granted partial summary judgment in Ripple Labs’ favor regarding the sale of its XRP token. As we previously discussed here, the court held in deciding cross motions for summary judgment that defendants’ “programmatic” offers and sales to XRP buyers over crypto asset trading platforms and Ripple’s “other distributions” in exchange for labor and services did not involve the offer or sale of securities under the U.S. Supreme Court’s decision in SEC v. W.J. Howey Co.