FiSolve Weekly News Digest: July 11, 2025

Here is what we're reading in the news this week...

SEC Brings Action Against Investment Adviser and its CEO for Charging Improper Fees

The Securities and Exchange Commission charged a Chicago based investment adviser and its CEO with charging more than $2.4 million in fees to its clients over a more than four-year period without proper authorization or disclosure.  The SEC’s complaint seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against both defendants, and a conduct-based injunction against the CEO.  Read more here.

US Supreme Court Rules Federal Agencies

May Resume Layoffs

In an unsigned opinion, the U.S. Supreme Court ruled the Trump administration may pursue significant federal job cuts, which may also lead to the restructuring of certain agencies.  The opinion notes it does not consider the legality of any particular reduction in force or reorganization plans, as they are not before the Court.  Read more here.

Half of Managers Use AI To Determine

Who Gets Promoted and Fired

A survey by Resume Builder finds a majority of managers use artificial intelligence (“AI”) to make significant personnel decisions, including raises (78%), promotions (77%), layoffs (66%), and even terminations (64%).  The survey also finds two-thirds of managers are using AI to manage employees without having received any formal AI training.  Read more here.

SEC Charges Investment Adviser with Cherry Picking

The U.S. Securities and Exchange Commission announced that the U.S. District Court for the Southern District of New York entered a final judgment against a former South Carolina-based investment adviser representative (IAR), who the SEC alleged engaged in a long-running fraudulent trade allocation scheme, commonly referred to as “cherry-picking.”  The judgment enjoins the former IAR from violating certain provisions of the federal securities laws and orders the former IAR to pay more than $160,000 In disgorgement, interest and penalties.  Read more here.

Federal Court Orders Chicago Commodity Pool Operators, Owner, Former Chief Portfolio Manager to

Pay More Than $6M in Fraud Action

The U.S. District Court for the Northern District of Illinois entered a consent order imposing permanent injunctive relief, civil monetary penalties, disgorgement, and equitable relief against a Chicago commodity pool operator and a number of associated individuals.  The complaint filed by the Commodity Futures Trading Commission alleged the defendants made several false and misleading statements to prospective and existing pool participants and others in connection with its short options trading strategies.  The order includes monetary penalties and industry bars.  Read more here.

Commissioner Peirce Reminds Industry Tokenization

Does Not Create a Magic Loophole 

SEC Commissioner Hester Peirce emphasized that while blockchain technology and tokenization offer innovative ways to distribute and trade securities, they do not alter the fundamental legal nature of those assets. Tokenized securities remain subject to existing federal securities laws, regardless of whether they are issued by the original company or a third party.  Commissioner Peirce cautioned that such tokens may carry unique risks—especially when they do not confer legal ownership of the underlying asset—and could be classified as “receipts for securities” or “security-based swaps,” both of which carry specific regulatory obligations.  Importantly, the Commissioner urged market participants to engage with the SEC to ensure compliance and expressed the agency’s willingness to modernize outdated rules when warranted by technological advances.  Read more here.

ESMA Publishes Peer Review on Crypto Service Providers in Malta under the MICA

The European Securities and Markets Authority (ESMA) published the results of a peer review looking at the authorization of Crypto Asset Service Providers (CASPs) in Malta under the Market in Crypto Assets Regulation (MICA).  The peer review analyses the approaches adopted by the Malta Financial Services Authority (MFSA) in the authorization and early supervision of a CASP and provides recommendations to strengthen these processes.  Key findings include (1) Some material issues where not fully resolved when MFSA granted the CASP authorization, (2) some risks areas were not adequately assessed during the authorization process, and (3) the MFSA has demonstrated a good level of expertise and supervisory cooperation.  Read more here.

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