The SEC settled charges against the CEO of two brokerage firms for allowing employees to mislead customers. According to the SEC, the firms under the CEO's control engaged in a scheme that caused customers to pay substantially higher amounts than the disclosed commissions for buying and selling securities. The scheme involved concealing the practice of routing trading orders to an offshore affiliate in order to take hidden markups and markdowns. The CEO authorized his employees to suspend the taking of improper profits temporarily when a customer asked for a specific report that could reveal

The SEC announced that two former Chief Financial Officers ("CFOs") have agreed to return nearly a half-million dollars in bonuses and stock sale profits that they received when their software company was still committing accounting fraud. While not personally charged with the company's misconduct, the CFOs are required under Sarbanes-Oxley Act Section 304 to reimburse the company for bonuses and stock sale profits received during the time in which the fraud occurred. According to the SEC's order, the company overstated its pre-tax earnings and made material misstatements about its revenue

The Office of the Comptroller of the Currency ("OCC") issued an updated booklet titled "Personal Fiduciary Activities." The booklet is part of the Comptroller's Handbook. The revised booklet, which replaces the August 2002 version, provides updated guidance for examiners on risks and expected controls over personal fiduciary activities that may arise as part of the broader fiduciary and asset management activities of national banks or federal savings associations. The booklet also explains the risks that are inherent in offering personal fiduciary products and services, and suggests a

SIFMA asked the IRS to provide guidance to allow withholding agents to validate tax documents, such as W-8BENs, that are electronically scanned from third-party document repositories. Many investment managers of investment funds contract with third-party document repositories, such as Markit, to house tax documentation that the fund requests from new account holders. The fund uploads these forms electronically to the document repository and then authorizes specific investment banks and other withholding agents to access the documents on the document repository when a request is made for such

The IRS has identified three situations that are at high risk for a FATCA-related audit. These situations include (i) a withholding agent's failure to properly withhold or correctly perform due diligence, (ii) a foreign financial institution's failure to account for properly, and therefore report, its individual account holders, and (iii) a U.S. account holder's failure to report its accounts properly. Over the next several months, the IRS also will continue to tailor its enforcement to identify mismatches in the information it receives through the automatic exchange of FATCA-related