SEC Proposes to Rescind Investment Adviser Pay-to-Play Rule
On September 3, 2026, the SEC proposed eliminating its investment adviser pay-to-play rule, Rule 206(4)-5, along with the related recordkeeping requirements. If finalized, the proposal would remove a compliance regime that can impose a two-year compensation ban for even relatively minor political contributions and has long presented advisers with complex questions about covered employees, government officials, placement agents, and public pension investments.
But rescission would not mean the end of pay-to-play risk. The SEC emphasizes that improper efforts to influence government investment decisions could still implicate the Advisers Act’s antifraud provisions and fiduciary duties, while state and local pay-to-play and procurement laws, federal bribery statutes, public pension rules, and parallel MSRB and FINRA requirements would remain. The proposal also raises important questions for exempt reporting advisers, foreign private advisers, and firms that have embedded Rule 206(4)-5 requirements into contracts and compliance programs.
Our latest blog post examines the SEC’s rationale for the proposed rescission, what would—and would not—change for advisers, and the practical compliance and enforcement implications if the proposal becomes final. Click here to read the full article.
Permission to Speak (and a Reason To): FinCEN and Banking Agencies Clarify SAR Confidentiality Rules for Customer Communications About Fraud and Account Closures
Financial institutions have long approached communications about suspicious activity with caution given the strict confidentiality rules governing Suspicious Activity Reports (SARs). New
guidance from FinCEN and the federal banking agencies provides welcome clarity: institutions may discuss the underlying facts of potentially fraudulent or suspicious transactions with customers and third parties, so long as they do not reveal the existence of a SAR.
The guidance also addresses account restrictions and closures, confirming that institutions may tell customers that such actions relate to suspected fraud or suspicious activity — even if the customer might infer that a SAR was filed.
In our latest blog post, we break down the new guidance and what it means for fraud investigations, customer communications, account closures, and BSA/AML compliance. Click here to read more.
OCC Proposes Easing Non-Public Information Disclosure Rules and Removing Criminal Penalty References
On August 3, 2026, the OCC proposed a significant overhaul of its rules governing the disclosure of non-public OCC information, including confidential supervisory information (CSI). The proposal would expand the circumstances in which financial institutions may share CSI without prior OCC approval—including with affiliates, service providers, M&A counterparties and certain advisers—and would remove the rules’ express reference to potential criminal liability for unauthorized disclosures.
While the changes could make navigating NPOI substantially easier, they may also create new compliance considerations. As institutions gain greater flexibility to share sensitive supervisory information, they may need to reassess contractual protections and controls designed to prevent recipients from misusing that information.
We examine the proposed framework, the OCC’s shift away from criminal enforcement, and the practical implications for financial institutions and their counsel. Click here to read the full post.
Delaware Supreme Court Rejects Jarkesy-Based Jury Trial Challenge to State Administrative Enforcement Proceeding
On July 16, the Delaware Supreme Court held that defendants facing securities fraud and registration claims in administrative proceedings brought by the Delaware Investor Protection Unit are not entitled to a jury trial under the Delaware Constitution, distinguishing the U.S. Supreme Court’s decision in SEC v. Jarkesy. Applying its recently adopted Blue Beach Bungalows framework, the court concluded that the state statutory claims are not sufficiently analogous to common-law actions historically tried before a jury, despite the availability of monetary penalties.
The decision underscores that jury-trial challenges to state administrative enforcement actions will turn on the text and history of each state’s constitution and statutory scheme, rather than Jarkesy alone. With similar challenges pending in other jurisdictions, including Arizona, the ruling provides important guidance for regulators and litigants assessing the continued viability of administrative enforcement proceedings seeking civil penalties. Click here to read the full blog post.
Beyond AML: FinCEN and FDIC Clarify That Section 314(b) Safe Harbor Extends to Fraud Prevention
The Financial Crimes Enforcement Network’s (FinCEN) June 12, 2026 guidance, along with the Federal Deposit Insurance Corporation’s (FDIC) July 9, 2026 Financial Institution Letter, signal a significant shift in how regulators expect financial institutions to use Section 314(b) of the USA PATRIOT Act.
Historically viewed as an anti-money laundering (AML) information-sharing tool, Section 314(b) is now expressly recognized as a mechanism for combating fraud. The updated guidance confirms that financial institutions may rely on the provision’s safe harbor to share information relating to suspected fraud, encourages real-time collaboration among institutions, and highlights the role of Section 314(b) in improving suspicious activity reporting and detecting illicit activity more quickly.
Our latest blog post examines the agencies’ expanded interpretation of Section 314(b), including the broader range of fraud-related information that may be shared, FinCEN’s encouragement of joint suspicious activity report (SAR) filings and proactive information sharing, and the governance, compliance, and supervisory considerations for institutions evaluating or expanding their Section 314(b) programs. The post also explores how the guidance reflects the continued convergence of fraud prevention and AML compliance and what these developments may mean for financial institutions’ information-sharing practices and supervisory expectations. Read the full post here.
President Trump Signs “Fair Banking” Executive Order Directing Financial Regulators to Remedy Past and Present Debanking Practices
On August 7, 2025, President Donald Trump signed an executive order titled “Guaranteeing Fair Banking for All Americans,” directing federal agencies to combat “debanking” — the denial or termination of financial services based on political views, religious beliefs, or industry affiliation. The executive order expands on numerous recent federal and state initiatives targeting debanking — including the joint U.S. Department of Justice (DOJ)/Commonwealth of Virginia Equal Access to Banking Task Force, two recent bills introduced in the U.S. Senate, and actions by the federal financial regulators to remove “reputation risk” as a supervisory consideration.
