News Nuggets | 13 September: SEC Charges Virtu, YieldStreet; HK Warns against Crypto Firm

SFC Issues Warning on Unregulated Virtual Asset Trading Platform JPEX

The Securities and Futures Commission (SFC) has issued a warning against the unregulated virtual asset trading platform Trading Platform In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real Read this Term, JPEX. The SFC has observed several suspicious features about JPEX's practices and has requested social media influencers and key opinion leaders to cease promoting it.

“The SFC takes this opportunity to warn investors to be cautious about investment opportunities that seem too good to be true. Investors should be skeptical of investment advice posted on social media platforms and instant messengers by KOLs who are often paid promoters but not investment professionals,” the market watchdog commented in a written statement.

JPEX operates as a Virtual Asset Trading Platform (VATP) through its website jp-ex.io, a site that has been flagged on the SFC's Alert List since July 8, 2022. Although JPEX holds registrations with some foreign regulatory bodies, these do not grant the platform legal authorization to offer virtual asset trading services in those regions. Contrary to its claims of being headquartered in Dubai and overseen by the Virtual Assets Regulatory Authority of Dubai (VARA), JPEX is conspicuously absent from VARA's publicly available list of licensed virtual asset service providers.

SEC Charges YieldStreet for Misleading Investors

The Securities and Exchange Commission (SEC) has charged YieldStreet Inc. and its subsidiary, YieldStreet Management LLC, for failing to disclose critical information to investors in a $14.5 million asset-backed securities offering. The SEC found that YieldStreet did not disclose a heightened risk of being unable to seize collateral in the event of a loan default, leaving investors facing significant losses.

Today we announced a settled action against New York-based YieldStreet Inc. and its registered investment adviser subsidiary, YieldStreet Management LLC, for failing to disclose critical information to investors in a $14.5 million asset-backed securities offering.

— U.S. Securities and Exchange Commission (@SECGov) September 12, 2023

“YieldStreet aims to unlock the complex alternative investments market for retail investors but failed to disclose glaring red flags it had about the security of the collateral backing this offering,” Osman Nawaz, the Chief of the SEC Enforcement Division’s Complex Financial Instruments Unit, said. “As this case shows, we are committed to ensuring that investors in any asset class, including ‘alternative’ asset classes, receive complete and accurate disclosures about those investments.”

SEC Files Charges Against Virtu Financial

The SEC has also filed charges against broker-dealer Virtu Americas LLC and its parent company, Virtu Financial Inc., for making false and misleading statements regarding information barriers. The SEC alleges that Virtu Americas failed to safeguard sensitive customer information, creating a significant risk of misuse.

Today we filed charges against broker-dealer Virtu Americas LLC and its parent company, Virtu Financial Inc. for making materially false and misleading statements and omissions regarding information barriers to prevent the misuse of sensitive customer information.

— U.S. Securities and Exchange Commission (@SECGov) September 12, 2023

“Virtu allegedly painted a materially misleading picture as to the safeguards it had in place to protect its customers’ confidential information, even when customers specifically asked about the firm’s handling of their post-trade information,” Carolyn M. Welshhans, the Associate Director of the SEC’s Enforcement Division, stated. “As our enforcement action shows, the SEC is committed to ensuring that firms provide accurate information for customers to make their investment decisions.”

Isavella Frangou Bids Farewell to payabl. After a Decade

Isavella Frangou, a key figure at payabl., announced her departure after a decade-long tenure. Starting as a Sales and Marketing Manager, Frangou climbed the ranks to lead Global Sales. She expressed gratitude towards her colleagues, mentors, and customers, and is looking forward to new opportunities in her career.

“As I step into this new chapter of my career, I'm excited about the possibilities ahead and the chance to apply the skills and experiences I've gained at payabl. to new endeavors. I'm also open to connecting with fellow professionals who share similar passions and interests,” Frangou wrote in LinkedIn post.

Paul Simpson Joins Broadridge as Vice Chairman

Broadridge Financial Solutions has appointed Paul Simpson as the Vice Chairman of its Global Technology and Operations business. Simpson brings over 30 years of experience in financial services and will focus on enhancing client relationships and accelerating product initiatives. He will report to the Broadridge President, Chris Perry and GTO President, Tom Carey.

"Paul's insights will be incredibly valuable as we drive both simplification and innovation in the front and back office for Capital Markets and deliver the Wealth Management platform of tomorrow to our clients today," Carey commented. "Paul brings an important understanding of the technology and operational needs of our clients."

Broadridge Unveils Next-Gen Digital Investor Communications Platform

In a separate announcement, Broadridge revealed the international launch of its next-generation digital communications platform, Broadridge Communications Cloud. The platform aims to improve investors' experiences by providing enhanced customer experiences and data-centric insights, thereby reducing costs.

"As the world continues to shift to digital and more personalized communications, investors are demanding the same type of experience, access, and instant service from their financial service providers," Demi Derem, the Senior Vice President of International Investor Communications, Digital Transformation & Market Innovation at Broadridge, commented.

TS Imagine Announces Partnership with eflow

TS Imagine has entered into a strategic partnership with eflow, a provider of regulatory compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term solutions. The collaboration aims to enhance trade surveillance capabilities and will allow mutual clients to meet regulatory requirements more effectively.

"eflow's reputation for innovation aligns with TS Imagine's commitment to delivering cutting-edge technology and solutions to our clients. This partnership bolsters our ability to provide a wide range of surveillance and market abuse tools, enabling clients to monitor their trading behavior throughout the day,” Alex Carteau, the Head of Corporate Development at TS Imagine, said.

Komainu Adds Hidden Road to Its Collateral Management Platform

Komainu, a regulated digital asset custody service provider, announced that Hidden Road has joined its collateral management platform, Komainu Connect. This addition aims to enable the leverage of digital assets in collateralization scenarios while keeping them in secure, regulated custody.

“Hidden Road is a key addition to our expanding collateral management network, representing another piece of the puzzle in bringing this much needed and institutional grade offering to the digital asset marketplace,” Nicolas Bertrand, the CEO at Komainu, said.