News & Events – Bates Research

Download this illustrative and detailed chartbook featuring U.S. economic and capital markets analysis for 2023. From Bates Group Director Greg Kyle and CEO Ben Pappas.

For managers at financial institutions to understand AI risk, they first need to conduct a thorough inventory of what AI is being used, by whom, and for what purpose inside their firm. Regardless of where an institution is in its AI journey, it’s best to take the time to conduct an AI inventory and risk assessment to identify and remediate risks in order to stay safe and sound.

2023 was an interesting year in FINRA dispute resolution. While customer filings dipped to a near-decade low, intra-industry cases grew 50% year-over-year. Despite the shift, core dispute themes remained stable, with top customer-member controversies and security types holding steady. We take a look at the entire year's statistics and trends in this new report.

As a leading provider of financial consulting services, Bates Group has extensive experience defending allegations of transaction fraud on brokerage or bank accounts through expert analysis and testimony, as well as assisting financial institutions in preventing and deterring transaction fraud. 

This week is Identity Theft Awareness week, sponsored by the FTC. An increasingly harmful form of ID Theft is Account Takeover, which institutions can help prevent by requiring additional authentication elements to access accounts.

The Securities and Exchange Commission’s Division of Examinations publishes its examination priorities report annually to provide insights into its risk-based approach, including the areas it believes present potential risks to investors and the integrity of the U.S. capital markets. Reviewing their roadmap offers vital insights for firms. See our annual chart tracking the Division's changing priorities.

Bates Compliance Managing Director Brandi Reynolds offers her insights into the State of Financial Crimes 2024 report published by ComplyAdvantage. Specifically, the survey findings pertaining to Artificial Intelligence-based compliance solutions and the risks these tools can pose for the financial industry professionals who use them.

The CFPB has recently proposed a new rule to define the market for general-use digital consumer payment applications. The proposed market would cover providers of funds transfer and wallet functionalities through digital applications for consumers’ general use in making person-to-person payments for personal, family, or household purposes. Larger participants of this market would be subject to the CFPB’s supervisory authority under the Consumer Financial Protection Act (CFPA).

With 2023 wrapping up soon, Bates takes a look at what is and is not trending in matters resolved through FINRA arbitration through the first nine months of 2023.

Financial institutions play a vital role in detecting and reporting suspicious activity that may be related to financial crimes. The Financial Crimes Enforcement Network (FinCEN) issued recent alert to highlight a prominent virtual currency investment scam known as “pig butchering.” The alert points to several red flags that financial institutions should look out for to detect suspicious activity related to this scam.

Elder abuse is a devastating problem that affects millions of seniors every year. In its 2022 Elder Fraud Report, the FBI’s Internet Crime Complaint Center reported total losses of $3.1 billion reported by victims over 60 years old—an 84 percent increase in losses from 2021. This alarming statistic reveals just how important it is to be aware of elder abuse and take steps to prevent it.

AI and algorithms have wide usage but bring unique risks to organizations, including compliance risks due to potential bias, discrimination, and data breaches. The FTC issued guidance in April 2023 to help manage these risks and protect consumers.

In a recent Staff Bulletin, SEC staff clarified care obligations for broker-dealers and investment advisers towards retail clients. Both the Reg BI and fiduciary standards share the same principles and responsibilities towards retail investors, narrowing the differences between the two.

The Money Transmission Modernization Act (MTMA) was created to modernize the money transmission industry by allowing for comprehensive standards and requirements that reduce regulatory burden and encourage innovation, and improved consumer protections that allow for less confusing rules across states. In this article, we look at the three key benefits of the MTMA, as well as the current attitude of state legislatures toward its adoption.

FINRA and the SEC are increasingly focused on manipulative trading practices, such as wash sales and front running, due to an uptick in these violations and the regulators' use of advanced data analytics to detect potential market abuses.