Here is how it would work: The next head of the S.E.C., expected to be named in the coming weeks, could seek to put in place a new rule for broker-dealers, the financial intermediaries that all trades go through and that the agency oversees. The rule would require the broker-dealers to set up a special compliance program for clients known as “politically exposed persons,” a term that financial institutions know well as part of anti-money-laundering and bribery laws.
The S.E.C. compliance program would require the broker-dealers to ask those clients — which could be defined as members of Congress, their spouses and senior members of staff — to personally answer a questionnaire every time a trade is executed, irrespective of whether the trade is instigated by them or a financial adviser. That would eliminate the frequent excuse that Congress members give about not being involved in trades, even when they are….
‘Enforcement 40’ for 2020
Join Us On LinkedIn
Join the Securities Litigation and Enforcement Group on LinkedIn