Enforcement Actions

Wells Fargo Settles $85M Investor Suit Over “Sham Interviews”

Summary: Wells Fargo will pay $85 million to resolve a California federal shareholder class action alleging “sham” interview to meet diversity expectations. The class spans Feb 24, 2021–June 9, 2022. The deal arrives weeks before summary judgment and a March trial; class was certified in April, Ninth Circuit declined review in July. A related derivative deal includes a $100M borrower-assistance fund and a $10M insurance payment to the company.

Why it matters: Hiring practice representations can create security fraud exposure, particularly when coupled with investigations and sharp stock moves, even if probes close without action.

Potential actions: Recheck disclosures and controls around hiring/diversity programs; align HR, Legal, and IR on how policies are implemented vs. described; prepare rapid-response investor communications for policy changes or inquiries.

Read More Here (Law360)

Rule Making

FinCEN SAR FAQ Update

Summary: NFA’s Oct 15 notice flagged FinCEN responses to frequently asked SAR questions for FCM/IB members (useful reference for adviser affiliates trading derivatives).

Why it’s important: Clarifies expectations around SAR decisioning, sharing, and documentation, relevant to enterprise AML programs touching futures/FX activity.

Action items: These AML requirements apply to many financial institutions, such as BDs, FCMs and IBs, but don’t currently apply to investment advisers, commodity pool operators and commodity trading advisers.Such requirements may become applicable to all such entities in the future.Companies that are currently subject to such requirements will want to circulate the FAQ to AML leads; validate SAR escalation/playbooks; refresh training snippets for trading desk personnel.

Read More Here(NFA)

In The News

States Urge Delaware High Court Not to Extend Jarkesy to State Securities Cases

Summary: NASAA urged the Delaware Supreme Court to uphold the dismissal of Swan Energy’s suit against the state’s Investor Protection Unit, rejecting Swan’s bid to apply SEC v. Jarkesy to Delaware’s administrative securities cases. A trial court held in June that Jarkesy doesn’t apply because Delaware’s constitution doesn’t guarantee a jury in such matters, and NASAA warns a reversal could ripple across state enforcement. Meanwhile, the IPU’s 2020 administrative case alleging Delaware Securities Act violations tied to high-risk oil-and-gas sales remains ongoing.

Why it matters: The case tests whether Jarkesy limits state regulators’ use of in-house tribunals to seek monetary penalties. A ruling extending Jarkesy could constrain state agencies’ adjudicative powers; affirmance would preserve existing administrative enforcement frameworks that NASAA members rely on to protect investors.

Potential actions: Monitor the Delaware Supreme Court appeal and briefing from NASAA, Swan Energy, and the IPU; evaluate how a ruling might affect the forum and strategy of state securities actions you could face; and ensure counsel is prepared for potential shifts in jury-trial rights in state administrative proceedings.

Read More Here(Law360)

Events

Orical’s Regulatory Breakfast Briefing

Summary: Orical’s Breakfast Briefing on November 13, 2025 (9:00 AM ET; 641 Lexington Ave, FL 17; in person or virtual) will explore how operational due diligence and regulatory readiness reinforce each other across governance, controls, and investor communications, featuring special guest Michael Merrigan, Founder of Shadmoor Advisors.

Why it matters: LP scrutiny and regulator expectations are converging, so strong ODD now functions as evidence of compliance maturity. Aligning ODD testing with policies, documentation, and monitoring reduces regulatory risk, speeds diligence reviews, and strengthens fund-raising narratives

Potential action: Register to attend either virtually orin person!

Click Here to Register (Orical)

About Orical

Orical is a trusted leader in investment management compliance consulting and compliance technology solutions. Founded by experienced investment management attorneys and former C-Suite executives, Orical has spent over 15 years helping investment advisers, private funds, and asset managers meet regulatory requirements with confidence. Our team delivers practical, businessfocused compliance solutions designed to reduce risk, streamline operations, and navigate complex SEC and regulatory challenges.

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