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Companies would face more pressure to alert the public of hacks or other significant cybersecurity incidents under a new plan from the U.S. Securities and Exchange Commission, Bloomberg News reported. The SEC on Wednesday proposed requiring publicly-traded firms to disclose breaches within four days. The demands would apply to incidents that are considered “material,” or important to the average investor. The plan, which was supported by the commission’s three Democrats, is the latest move by Wall Street’s main regulator to prod companies to be more transparent when attacks occur after years of high-profile incidents. Last month, the SEC proposed requiring investment companies to bolster their cybersecurity systems. “Cybersecurity incidents, unfortunately, happen a lot,” SEC Chair Gary Gensler said in a statement. “A lot of issuers already provide cybersecurity disclosure to investors. I think companies and investors alike would benefit if this information were required in a consistent, comparable, and decision-useful manner.” Firms currently rely on 2018 SEC guidance to determine when to disclose incidents, which does not specify a time-frame for notifying the public.

A unit of Deutsche Bank AG agreed to pay a $2 million penalty to an industry-backed regulator over allegations it failed to ensure that its customers received the best prices for securities orders, Bloomberg News reported. Deutsche Bank Securities Inc. improperly routed some customer orders through its dark pool known as SuperX from January 2014 to May 2019, the Financial Industry Regulatory Authority said in a Tuesday statement. The brokerage, which didn’t admit or deny the allegations, failed to change the arrangement despite knowing it resulted in delays and lower order fill rates, the regulator said. The firm was accused of violating the so-called best execution rule, which requires brokers to find the most favorable terms for their customers. Companies must also periodically review the quality of their trade execution by looking at factors such as speed, order size and transactions costs. Regulators including the Securities and Exchange Commission have spent years trying to root out wrongdoing on alternative trading systems, which allow clients to buy and sell shares with more anonymity than they can on traditional stock exchanges. In some cases, Deutsche Bank Securities routed more orders to SuperX than any other dark pool even though the bank ranked other venues higher in terms of execution quality, according to Finra. The firm also failed to disclose to investors material information about its trading systems, the regulator said. Deutsche Bank closed SuperX in September as part of its exit from U.S. equity sales and trading, according to Finra.

Activist investors including Carl Icahn say a U.S. proposal that would require them to disclose 5% stakes in companies days sooner than current rules could make it unprofitable for them to build the large positions they need for successful campaigns, Reuters reported. The Securities and Exchange Commission (SEC) proposed the new rule last month in a push to reduce the information advantages that the $18 trillion private funds industry has over retail investors. The rule would halve to five days the time investors have to disclose when they have bought at least 5% of a public company. That news often causes the stock to jump as activists like Icahn, Starboard Value and Elliott Management announce they will leverage the stake to push for changes, like selling businesses or adding board members. Because activists spend millions of dollars on research and legal fees, they say they often need 7% to 9% of a target's stock to make campaigns viable. With the shorter reporting window, accumulating that many shares could be too costly to be profitable. The long-term impact of the SEC proposal, activists said, would be to reduce the number of such campaigns, weakening an important force for holding companies accountable to shareholders and making the best use of their capital, which benefits all investors.

Hedge funds and other large investors would have to disclose significantly more information about the stocks they short under a new plan from the Securities and Exchange Commission, Bloomberg News reported. Institutional money managers would have to submit monthly filings with details on large equity short positions, according to a proposal released by the agency Friday. Investors would also have to disclose some daily activity affecting their bets. While most of these details would remain confidential, the SEC wants to make some aggregate data about large positions in specific securities available to the public. Short selling has been a staple of U.S. equities markets for years, but it’s become a political lightening rod following the meme-stock mania that began in January 2021 when retail traders banded together via online message boards and bought up stocks like GameStop Corp. that they said hedge funds were betting against. Separately, the Justice Department has launched an expansive criminal investigation into relationships between investors involved in the sales and research firms. The plan is the latest effort by SEC Chair Gary Gensler to collect more data from hedge funds and other large investors about their trading activities. It also comes after the agency earlier this month began considering rules to shorten how long it takes to settle stock trades, another action in response to last year’s wild stock trading.

The Securities and Exchange Commission is examining the relationship between the U.S. arm of Binance, the world’s largest cryptocurrency exchange, and two trading firms with ties to Binance’s founder, the Wall Street Journal reported. The two trading firms, Sigma Chain AG and Merit Peak Ltd., act as market makers that trade cryptocurrencies on the Binance.US exchange. One area of focus for regulators is how Binance.US disclosed to customers its links to the trading firms. On its website, Binance.US says that affiliated market makers may trade on the exchange, though it doesn’t name which firms might do so. The SEC requested information about the two entities from Binance.US, which is Binance’s U.S. affiliate and is the subject of an existing enforcement probe. Corporate documents from 2019 tie Changpeng Zhao, Binance’s founder and chief executive officer, to the two trading firms, and former executives say that as of late last year Mr. Zhao controlled them both.

The Securities and Exchange Commission (SEC) announced yesterday that cryptocurrency firm BlockFi Lending LLC will pay $100 million to settle claims it failed to register its crypto lending account product with federal and state regulators, The Hill reported. BlockFi yesterday agreed to pay $100 million split between the SEC and 32 states and end its BlockFi Interest Accounts (BIAs), which allowed cryptocurrency holders to deposit their digital tokens with the company in exchange for interest. BlockFi would lend and invest the cryptocurrency to generate interest for the accounts and held roughly $10.4 billion in assets for roughly 570,000 BIA account holders, according to the settlement. The SEC charged BlockFi with violating 82-year-old federal rules that require companies that offer securities — including investment contracts — to register those products with the agency. "This is the first case of its kind with respect to crypto lending platforms," SEC Chairman Gary Gensler said. "Today’s settlement makes clear that crypto markets must comply with time-tested securities laws. BlockFi agreed to offer a new version of the BIA registered with the SEC under the Securities Act of 1933, one of the first federal laws governing the sale of stocks and other investment products. The company did not admit to any wrongdoing, per the terms of the settlement.

The U.S. Securities and Exchange Commission on Thursday proposed changing the rules of its whistleblower program to make it easier for tipsters to claim bounties, Reuters reported. The changes, which are subject to public consultation, would scrap a Trump-era rule that had afforded the agency greater discretion to determine the size of whistleblower payouts. Critics said that Trump rule deterred whistleblowers since it gave the SEC the discretion in some instances to lower awards. The new proposal guarantees that the SEC would consider the dollar amount of a potential award for the "limited purpose" of increasing rather than lowering it. It would also make it easier for tipsters to claim awards when their information leads to a successful enforcement action brought by other federal agencies, known under the program as a 'related action.' SEC Chair Gary Gensler said in a statement that the changes aim to ensure whistleblowers are both incentivized and appropriately rewarded for their efforts in reporting potential violations of the law to the agency. The SEC's whistleblower program was created by Congress after the 2007-2009 global financial crisis and receives thousands of tips annually. Currently, the SEC can reward tipsters whose original information leads to a penalty exceeding $1 million with rewards of between 10% and 30% of the fine.

Regulators proposed expansive new requirements for private investment funds Wednesday as part of a widening effort to police a rapidly growing but relatively opaque corner of the capital markets, the Wall Street Journal reported. In a Wednesday morning meeting, the Securities and Exchange Commission passed a proposal that would force hedge funds and private-equity funds to provide basic disclosures to their investors and guard against conflicts. The Democratic-controlled commission approved the proposal by a 3-to-1 vote, signaling a strong chance that a final version will be adopted. The agency will now seek public comments for at least two months before issuing a final rule. Since taking office last April, SEC Chairman Gary Gensler has moved to aggressively tighten rules on Wall Street intermediaries, aiming to save money for investors and companies raising capital. A major focus in recent weeks has been on private markets, where firms operate with far less government oversight than publicly traded companies or mutual funds.

Private equity firms would be required to provide expansive disclosures about the fees shouldered by investors under rules set to be considered by the U.S. Securities and Exchange Commission, Bloomberg News reported. The changes, which the regulator plans to propose next week, would force the companies to disclose specific expenses they pass on to clients. The rule would also address how frequently firms are required to provide the information, one person said. SEC Chair Gary Gensler has complained that the industry’s fees are opaque and too high, meaning investors such as pension funds may not be getting the best deal. The SEC declined to comment. New disclosure mandates could give investors more bargaining power. “This could provide more ammunition to investors to negotiate lower costs,” said Igor Rozenblit, a former SEC official and managing partner at Iron Road Partners, which advises private equity firms on regulatory risks. Private equity lobbyists are already bracing for a fight, and they plan to argue that the fees are agreed to by sophisticated parties. It’s not the SEC’s first attempt to rein in the industry during Gensler’s brief tenure. In January, the regulator proposed rules requiring that large hedge funds and private equity firms to confidentially inform officials about big losses in close to real-time — a significant change to the quarterly reports they file now.