CUBE RegNews:
September 20^th

SEC charges adviser for failure to register

The Securities and Exchange Commission (SEC) has charged Concord Management LLC and its owner, Michael Matlin, for operating as unregistered investment advisers to a wealthy former Russian official. 

According to the SEC’s complaint, Matlin founded Concord in 1999 to provide investment advice for compensation and to supervise and manage the client’s investments in United States-based private funds. The complaint alleges that, from at least 2012 through March 2022, Concord and Matlin sourced, arranged, and monitored hundreds of investments, worth billions of dollars, in private equity funds and hedge funds on behalf of the client. 

Despite their activities, Concord and Matlin failed to register as investment advisers with the SEC, as required by law. By failing to register, Matlin and Concord avoided certain legal obligations for investment advisers that protect the investing public, such as various reporting requirements and examination by the SEC. 

In March 2022, the United Kingdom and the European Union designated Matlin and Concord’s client a sanctioned individual and the client’s assets were subsequently frozen. The SEC’s complaint alleges that, a month prior, in February 2022, Concord and Matlin assisted the client in his attempts to redeem investments and/or sell his securities portfolio. 

FCA finds little evidence that banks target politicized clients

The Financial Conduct Authority has found little to no evidence that bank accounts have been closed because of account holders’ political views. The research was conducted following the spat earlier in the year between Coutts bank and Nigel Farage.   

Only a handful of cases were found where an account had been closed or a customer complaint made. In the majority of these cases, it was because of customer behavior including racist language to staff. 

The FCA will continue to review the issue, however, and their additional work will include: 

• Further follow up to provide assurance of the accuracy of the data reported to the FCA 
• Additional supervisory work to be sure of firms’ conclusions on accounts closed for political reasons and closer analysis of accounts closed for reasons of reputational risk. 
• Further review of declined applications for and terminations of bank accounts. 
• Further research into the reasons why more than a million UK residents do not have a bank account 
• Engagement with consumer groups and organizations to understand the experiences of having services declined 
• A financial inclusion sprint in Q1 2024 focussed on improving consumer access to financial services. 

ESMA consultation paper update

The European Securities and Markets Authority has updated its forthcoming consultation paper publishing schedule. 

In what looks like being a busy financial quarter for the European Union’s EU’s financial markets regulator and supervisor, consultations are lined up to include: 

• Guidelines on the Submission of Periodic Information to ESMA by supervised benchmark administrators 
• DORA Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS) and Feasibility study 
• Discussion Paper on retail investor protection digitalization topics 
• Joint Committee guidelines on the system established for the exchange of information relevant to the assessment of the fitness and propriety 
• Call for evidence on T+1 
• MiCA guidelines and technical standards 
• Revision of RTS / ITS on securitization disclosure requirements 
• RTS on the European Single Electronic Format (ESEF) for taxonomy on sustainability information; and 
• RTS under EU Green Bond Regulation.