SDDco Perspective Newsletter

November 4, 2019 | Vol 14. Edition 1

Dear SDDco Clients and Colleagues: Our SDDco Perspective includes industry news, guidance, regulatory rule updates, deadlines, and other timely matters impacting brokers, advisors, fintech firms, taxpayers, investors, and their service professionals. The SDDco Perspective is made available on our website monthly at


Bryon Lyons

Bryon Lyons
CEO, SDDco Brokerage Advisors, LLC

Facebook’s Membership in Libra Making Serious Waves

On Wednesday, October 23, 2019, Facebook’s Mark Zuckerberg testified before the House Financial Services Committee to discuss Facebook’s membership in the cryptocurrency project, Libra. Zuckerberg faced a great deal of skepticism that Facebook could fix its current policies and procedures regarding political ads and the protection of user data, let alone be a major player in a new cryptocurrency that many fear could presage a new unregulated shadow banking system that brings with it anti-money laundering and national security concerns, and the threat that it could destabilize the global banking system generally. “I get that I’m not the ideal messenger for this right now,” Zuckerberg said. “We certainly have work to do to build trust.” Mr. Zuckerberg came to Capitol Hill to talk about Libra as a cryptocurrency that could provide a safe way for billions of people around the world without bank accounts to exchange money affordably in the same way they can send text messages. Mr. Zuckerberg pledged that Facebook would not participate in the Libra project if US regulators did not approve it.

NYT – Zuckerberg Withstands a Washington Beating
NYT – There’s a Lot We Still Don’t Know about Libra


Erin Furtado

Erin Furtado
Head of Marketing

A New Crypto Exchange That Can’t Be Hacked!

Over the years, the Bitcoin exchange industry has enhanced its crypto asset security, but threats are always looming over the ecosystem. Developers have figured out how to build exchanges that do not require users to relinquish control of their funds until they want to make a trade. One of the new exchanges practicing this is Nash, which helps users bypass handing over their crypto assets to a third party before they trade. However, while customer funds cannot be stolen by hacking an exchange’s wallet, hackers could still prevail if they were able to push out a malicious software update to Nash customers. Please be aware of this if you are playing in the crypto space.

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Gary Fox

Gary Fox

FINRA 2019 Examination Findings Report Released!

FINRA released its 2019 Report on FINRA Examination Findings and Observations on October 16, 2019. The report provides a summary of the key issues FINRA found while conducting exams throughout the industry in the last year. It is a valuable read; the report can serve as a roadmap for a firm’s compliance team seeking to enhance its supervisory controls testing.

The 2019 report has a streamlined structure compared to its previous two years' predecessors, separating the report into findings and observations. According to FINRA, “This report reflects key findings and observations identified in recent examinations and contains effective practices, where noted, that could help firms improve their compliance and risk management programs.”

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To learn more about how SDDco can help strengthen your firm’s compliance program, click here.


Casey Muller

Casey Muller
Director of Legal & Internal Compliance

How reliable is FINRA’s BrokerCheck for background on Registered Representatives?

Did you know that registered representatives can have their BrokerCheck expunged of negative markings or customer/investor disclosures through an arbitration process with FINRA? A recent study by the PIABA Foundation suggests that FINRA’s current process for expungement makes it too easy for registered representatives to remove unwanted disclosures, thus, undermining the integrity and overall reliability of BrokerCheck.

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Bob Fortino

Bob Fortino
Managing Partner

IRS Issues FAQ’s on Virtual Currencies

In early October, the IRS issued more guidance on the taxation of virtual currency transactions. Specifically, the IRS addressed “Hard Forks” and “Airdrops” taxability to the recipient. The IRS tackled other subjects as well. They addressed tax principles related to payment of services with virtual currencies, gifting virtual currencies to a charitable organization, exchange of virtual currencies for other property, and the sales of multiple units of a virtual currency. This guidance goes a long way in providing answers to some of the basic tax questions surrounding these currencies.

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SDDco Group makes this general information available for educational purposes only, the contents of which were not originated from SDDco. SDDco is not affiliated with any of the publishing persons or entities of the articles herein. The information provided should not be construed as legal advice. This email may constitute an advertisement under U.S. law. | | (212) 751.4422