September 21, 2020
McGuireWoods partners Cheryl Haas, Emily Gordy and Alexander Madrid and associate Natasha Cooper wrote a Sept. 4, 2020, Corporate Counsel Business Journal article about what investment advisers and broker-dealers should anticipate after the first wave of COVID-19.
In their article, the authors discussed how firms can reduce the increased risk of financial, regulatory and reputational harm that can result from individuals seeking to exploit a crisis like COVID-19 by perpetrating frauds or Ponzi schemes that target firms or customers.
State regulators, FINRA and the SEC have increased warnings in this time of market volatility and heightened cybersecurity concern. The authors warned that it is imperative for “firms to stay alert, follow up on red flags, connect the dots, and remind their registered representatives and financial advisers to stay alert and escalate issues or concerns” and to “remain vigilant regarding potential operational errors, especially when volatile markets tend to magnify the impact of errors.”