FiSolve Weekly News Digest: February 27, 2026

Here is what we are reading in the news this week...

SEC’s Division of Enforcement Announces

Updates to Enforcement Manual

The Securities and Exchange Commission (“SEC”)’s Division of Enforcement (“Division”) announced significant updates to its Enforcement Manual.  According to the SEC’s press release, these updates underscore the SEC’s ongoing commitment to fairness, transparency, and efficiency in the investigations conducted by the Division.  They include changes to investigative procedures that are intended to enhance consistency and uniformity in the Division’s practices and to create greater efficiencies in support of the SEC’s mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.  The Enforcement Manual, which was last revised in 2017, will undergo yearly reviews going forward.  The latest updates include the following areas: (1) ensuring a uniform “Wells” process, (2) facilitating simultaneous consideration of settlement recommendations and waiver requests, (3) additional updates to the Enforcement Manual, including around cooperation guidelines.  Read more here.

SDNY Announces Corporate Enforcement and

Voluntary Self-Disclosure and Cooperation Program

for Financial Crimes

The US Attorney for the Southern District of New York (“SDNY”) announced a new Corporate Enforcement and Voluntary Self-Disclosure Program for illegal activity involving fraud and financial misconduct affecting market integrity.  The program seeks to build on years of experience with corporate self-reporting, a focus on individual accountability, and a commitment to the interests of victims.  The program also is designed to protect investors, root out wrongdoing more quickly, and strengthen the integrity of the financial markets by encouraging companies to promptly disclose misconduct and take swift remedial measures.  According to SDNY, the program establishes clear guidelines and predictable treatment for companies that voluntarily disclose certain classes of criminal activity to its office.  Under this program, eligible companies that self-report qualifying illegal activity, fully cooperate with law enforcement, commit to ongoing reporting of criminal conduct for three years, and remediate harm caused by the misconduct will have a clear, agreed path to a declination.  Specifically, SDNY will extend a conditional declination letter to qualifying companies shortly after they make a qualifying self-report.  After a company satisfies its cooperation and remediation obligations and restitutes victim losses, SDNY will provide a final declination letter, concluding the matter without criminal charges.  Read more here.

"Job Hugging" Is Undermining Workplace Outcomes

A report issued by MetLife finds that a growing number of employees are “job hugging”—remaining in their jobs primarily due to economic uncertainty and financial necessity rather than genuine commitment.  The report finds this creates the appearance of workforce stability but masks declining engagement and wellbeing.  About 56% of employees report staying out of necessity, and while most expect to remain with their employers, job huggers tend to be less engaged, less healthy, and less productive than employees who stay by choice.  The report concludes that high retention alone is a misleading measure of organizational health and emphasizes that employees who feel connected, valued, and supported are significantly more likely to be engaged, healthy, and voluntarily loyal, making workplace connection a key driver of stronger business outcomes.  Read more here.

US Department of Labor Proposes Rule Clarifying Employee, Independent Contractor Status under Federal Wage and Hour Laws

The U.S. Department of Labor’s Wage and Hour Division announced a proposed rule designed to help workers and employers better understand how to determine when a worker is an employee and when the worker may be classified as an independent contractor under the Fair Labor Standards Act and related federal laws.  The proposed rule would rescind the Department’s 2024 final rule addressing the classification of independent contractors and replace it with an analysis for employee classification similar to the one adopted by the department in 2021.  The Department states that consistent with Supreme Court and Federal Circuit Court precedent, the proposed rule would make it easier to properly differentiate between employees with the protections under the Fair Labor Standards Act and those workers who work as independent contractors.  Read more here.

California DFPI Establishes Venture Capital Diversity Reporting and Registration Requirements 

The California Department of Financial Protection and Innovation’s (DFPI) Venture Capital Companies (VCC) announced a new reporting program, which requires venture capital firms with a nexus to California to register with the DFPI beginning March 1, 2026, and annually report aggregated, anonymized demographic information about the founding teams of companies they funded in the prior year.  Covered venture capital firms must distribute a DFPI-prescribed voluntary survey to founders, compile the returned demographic data, and submit an annual report (first due April 1, 2026), which will be made publicly available.  The DFPI states that the program is intended to increase transparency regarding venture capital investment practices affecting diverse founders.  Read more here.

SEC Proposes Amendments to Reduce Burdens in Reporting of Fund Portfolio Holdings

The Securities and Exchange Commission proposed amendments to the form used by most registered investment companies to report portfolio-related information.  The changes are designed to reduce reporting burdens without significantly affecting the SEC’s use of the data or the public’s ability to assess relevant information about a fund.  The proposed amendments to Form N-PORT follow a review (in accordance with a Presidential Memorandum) of the amendments the SEC made to the form in 2024.  The proposal considers developments that have occurred after the SEC’s adoption of those amendments.  In connection with the proposed amendments, but by separate action, the SEC extended the compliance dates for those Form N-PORT reporting requirements related to the “Names Rule” under the Investment Company Act of 1940, which addresses certain investment company names.  The new compliance dates are Nov. 17, 2027, for fund groups with net assets of $10 billion or more and May 18, 2028, for fund groups with less than $10 billion in net assets as of the end of their most recent fiscal year.  Read more here.

SEC Announces Roundtable on Private Markets Valuation as Retail Investor Access Accelerates

With retail exposure to alternative investment becoming more commonplace, the Securities and Exchange Commission announced it will hold a roundtable on March 4 to discuss private market valuations and responsible retailization.  The roundtable will be hosted by the Division of Investment Management from 1 p.m. to 3 p.m. ET at the SEC’s Washington D.C. headquarters and streamed live on the SEC website.  Read more here.

FINRA Fines and Censures Firm for

Inadequate WSPs around UTMA Accounts

Over an approximately 3 ½ period, FINRA found a financial services firm failed to establish and maintain a supervisory system, and failed to establish, maintain, and enforce written supervisory procedures (WSPs), reasonably designed to achieve compliance with FINRA Rule 2090, which requires member firms to use “reasonable diligence” to determine “the essential facts concerning every customer and concerning the authority of each person acting on behalf of such customer.” Specifically, with respect to accounts established under the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act, the firm failed to establish, maintain, and enforce supervisory systems and WSPs to track or monitor for changes in the authority of custodians of such accounts to effect transactions on behalf of the account beneficiaries.  The firm was found to have violated FINRA Rules 3110(a), 3110(b) and 2010. The firm agreed to a censure and a fine of $200,000.  Read more here.

Federal Reserve Board Proposes Rule to Remove Reputation Risk from its Supervision of Banks

Following earlier actions to remove reputation risk from its supervision of banks, the Federal Reserve Board requested comment on a proposal to codify that removal.  The proposal reiterates the Board's policy against penalizing or prohibiting an institution from banking a customer engaged in legal activity.  Read more here.

FCA Fines Social Media Influencers for Issuing Unauthorized Financial Promotions

The Financial Conduct Authority sentenced seven social media influencers for their role in the promotion of an unauthorized foreign exchange trading scheme.  The total fines exceed £21,497.04.  While no prison time was involved in this case, the FCA notes breaching the General Prohibition is considered an offense under Sections 19 and 23 of the Financial Services and Markets Act 2000 punishable upon conviction by a fine and/or up to 2 years’ imprisonment.  Read more here.

ESMA Issues a Supervisory Briefing

on Algorithmic Trading

The European Securities and Markets Authority (ESMA) published a supervisory briefing to support consistent supervision of algorithmic trading across the EU.  The briefing provides National Competent Authorities with practical tools and clarified expectations for supervising firms engaged in algorithmic trading under MiFID II.  It focuses on key areas where supervisory practices have diverged, including pre-trade controls, governance arrangements, testing frameworks and outsourcing of algorithmic trading systems.  The briefing also touches upon emerging technological developments, such as Artificial Intelligence (“AI”) outlining considerations for the use of AI.  This section of the briefing aims to help supervisors assess new risks and ensure that firms adopt robust and responsible approaches when deploying advanced technologies in their trading operations.  Read more here.

Healthtech Exits Hit Record High

While AI Reshapes Investment Priorities

A report from PitchBook finds Healthtech venture funding staged a strong comeback in 2025, with startups raising $15.3 billion—up 26% YoY—as larger deal sizes and AI-driven growth rounds powered the rebound.  Fourth-quarter funding dipped slightly from earlier highs but remained more than double the prior-year quarter, underscoring renewed investor confidence. The median pre-money valuation rose to $31 million, reflecting sustained demand for AI-enabled healthcare delivery, operations, and revenue-cycle solutions.  Read more here.

📣 WEBINAR ANNOUCEMENT 📣

Culture and Talent Considerations

in the Financial Services Industry 

FiSolve’s Debi Yadegari will be joined by experts Tabitha Albright, Andrea Colabella, and Susi Shaw to discuss culture and talent considerations in the financial services industry.  With competition for top talent intensifying and firms navigating rapid industry change, our expert panel will break down what leaders need to know right now to build, manage, and retain strong teams.  There is no cost to attend this event.  Learn more about the webinar and reserve your spot today here.

💡FiSolve's Negotiation Tip of the Week💡

Talent Management

In high‑stakes talent negotiations, anchor the discussion around long‑term value alignment rather than short‑term compensation.  Executives who articulate a clear narrative about how the individual’s strengths map to strategic priorities (such as regulatory readiness, digital transformation, risk optimization, or client‑asset growth) create a context in which candidates see themselves as indispensable contributors, not replaceable assets.  This framing not only elevates the conversation above pure financial terms but also strengthens retention by reinforcing purpose, impact, and mutual benefit.

For informational purposes only.  Subscription may be required.

If you've found this weekly news digest to be helpful, we'd appreciate it if you would share it with your colleagues or on social media. You can subscribe to this newsletter HERE.