Litigation & Enforcement Attorneys Examine Evolving Enforcement Trends in Financial Industry Surveillance and the Rise of AI Compliance

In an article in The Review of Securities & Commodities Regulation, litigation & enforcement partner Amy Jane Longo, and associates Desiree Pelletier and Erin Stewart examine evolving enforcement trends in financial industry surveillance programs.

The authors provide an overview of the regulatory landscape governing surveillance compliance, highlighting the SEC and FINRA’s stated priorities, recent enforcement actions, and the growing role of AI in compliance. They discuss how regulators are focusing on supervision, recordkeeping, anti-money laundering, and the integration of new technologies, with surveillance topping examination priorities year after year.

Notable enforcement actions include cases involving deficiencies in supervision, failures to file suspicious activity reports, and inadequate insider trading controls. The article also explores how AI is transforming surveillance, enabling firms to proactively identify risks, but also introducing new challenges around data governance and regulatory expectations.

In light of these developments, the authors note that financial institutions should review and update their surveillance programs, internal controls, and compliance practices to ensure they meet evolving regulatory standards and heightened enforcement expectations.