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Massachusetts targets trading platform for aggressive tactics
On December 16, the enforcement section of the Massachusetts Securities Division filed an administrative complaint against a broker-dealer online trading platform alleging the company violated various state laws by using “aggressive tactics” to gain inexperienced investors. According to the complaint, the company, among other things, (i) used advertising techniques, including using young actors, to target younger individuals (with a median customer age around 31 years old) with little to no investment experience; (ii) failed to implement policies and procedures that were “[r]easonably [d]esigned to [p]revent and [r]espond to [o]utages and [d]isruptions on its [t]rading [p]latform,” resulting in nearly 70 outages throughout 2020; (iii) used “gamification strategies,” such as confetti raining down on the screen after a trade or requiring customers to “tap” a fake debit card to increase their position on the waitlist, to “lure customers into consistent participation” with the platform; and (iv) failed to review and supervise, in accordance with its own procedures, the approval of options trading accounts. The complaint asserts that the company’s tactics failed to adhere to the fiduciary conduct standard required of broker-dealers in the state of Massachusetts since the adoption of amendments in March, with enforcement beginning on September 1. Massachusetts is seeking an injunction, restitution, disgorgement, and administrative fines.
Rhode Island regulator extends work from home guidance for lenders
On September 28, the Rhode Island Department of Business Regulation, Banking Division, extended previous guidance (previously covered here and here) issued to mortgage loan originators, lenders, loan brokers, and exempt company registrants. The guidance permits working from home, even if the home is located outside of Rhode Island or is not a licensed branch, so long as specified data security provisions are met. The department extended this guidance until December 31, 2020.
Colorado regulator updates guidance to real estate businesses with new mask requirements
On August 31, the Colorado Department of Regulatory Agencies updated its Safer at Home: Additional Guidance for Real Estate Brokers & Servicers, previously covered here and here, to note that the executive order creating a statewide mask ordinance was extended by Executive Order D 2020 164. Real estate businesses and professionals are encouraged to review the guidance, which responds to frequently asked questions related to real estate services, including field services.
South Carolina regulator extends interim guidance to mortgage brokers permitting remote work
On July 30, South Carolina Department of Consumer Affairs updated and extended its interim guidance for mortgage brokers, previously covered here. The interim guidance permitting mortgage loan originators to work remotely will be effective until rescinded. The Department will provide fifteen days’ notice to affected businesses before rescinding the guidance.
Louisiana Office of Financial Institutions extends emergency declarations to non-depository entities
On July 24, the Louisiana Office of Financial Institutions extended emergency declarations for residential mortgage lenders, check cashers, bond for deed escrow agents and repossession agents, brokers and lenders licensed under the Louisiana Consumer Credit Law and Deferred Presentment and Small Loan Act, and pawnbrokers. The orders were previously covered here. Such entities are granted the authority to temporarily close licensed locations within Louisiana or to temporarily close and/or relocate to another location within the state. Mortgage loan originators are permitted to work from home, whether located in Louisiana or another state, even if the home is not registered with the LOFI. The declarations also provide instructions for notifying the LOFI of a temporary location change. The declarations will remain in effect as long as there is a public health emergency relating to Covid-19, or until rescinded or replaced.
Colorado governor permits further extensions of money transmitter and real estate broker licenses
On July 19, the Colorado governor issued Executive Order 2020 141, which extends Executive Order D 2020 015, as amended by several earlier orders, until August 18, 2020. Executive Order D 2020 015 authorizes the Department of Regulatory Agencies to promulgate and issue emergency rules extending the expiration date of licenses issued by the Division of Banking for money transmitters and licenses issued by the Division of Real Estate for real estate brokers.
Indiana provides broker-dealers with relief from branch examination regulation
On July 13, the Indiana Secretary of State, Securities Division, issued a compliance alert providing temporary relief from annual branch examination requirements. In light of the restrictions on travel caused by the pandemic, broker-dealers are not required to conduct an annual compliance examination in each branch office located in Indiana. However, a firm with the ability to conduct a remote branch examination during 2020 is encouraged to do so. Registrants are also reminded of their obligation to properly supervise agents and employees.
Colorado regulator reminds real estate businesses of business restrictions
On June 11, the Colorado Department of Regulatory Agencies (DORA) issued a reminder regarding the Safer at Home guidance for real estate businesses. In light of the various sources of guidance and versions of public health orders, DORA advises that real estate businesses and professionals review the Safer at Home: Additional Guidance for Real Estate Brokers & Servicers document, which responds to frequently asked questions related to real estate services.
CFTC extends no-action relief to market participants in light of Covid-19
On June 10, the Commodity Futures Trading Commission announced that it has extended through September 30, 2020, certain aspects of its no-action relief issued in response to Covid-19. The CFTC’s staff letter extends previously issued no-action guidance regarding certain regulatory requirements for persons who are registered with the CFTC as futures commission merchants, introducing brokers, swap dealers, retail foreign exchange dealers, and floor brokers. Certain relief for members of designated contract markets or swap execution facilities that are not registered with the CFTC is also extended. Those relying on relief are expected to establish and maintain a supervisory system to oversee activities of personnel who are working from remote locations during Covid-19.
Louisiana Office of Financial Institutions updates non-depository emergency declarations
On June 5, the Louisiana Office of Financial Institutions updated its non-depository 2020 Covid-19 emergency declarations to extend earlier guidance regarding closure of licensed locations and temporary location changes for residential mortgage lenders, brokers and originators, check cashers, lenders or brokers licensed pursuant to the Louisiana Consumer Credit Law and the Louisiana Deferred Presentment and Small Loan Act, pawnbrokers, and repossession agents and bond for deed escrow agents. The original emergency declarations were previously covered here, here, here, here, here, here, and here. The declarations extend the guidance until June 26, 2020, unless terminated sooner.