David Smyth

David Smyth

Brooks Pierce

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SEC Says No More Mr. Nice Guy on Investment Adviser Cybersecurity

Over the last couple years, the SEC’s cybersecurity bark has been worse than its bite. Its Office of Compliance, Inspections, and Examinations issued examination priorities in 2014. Commissioner Aguilar warned public...more

9/23/2015 - Broker-Dealer Brokers Cybersecurity Industry Examinations Investment Adviser OCIE Regulation S-P SEC Security and Privacy Controls

Nothing to See in This Story about the Electronic Communications Privacy Act

Check out this story. In it, we learn this: "Andrew Ceresney, director of the Division of Enforcement at the Securities and Exchange Commission, [told] the Senate’s Committee on the Judiciary at a hearing on Wednesday...more

9/21/2015 - Administrative Authority ECPA Electronic Communications Email Enforcement Google Government Investigations Law Enforcement Proposed Amendments SEC Yahoo!

Second Circuit Expands Scope of Dodd-Frank Anti-Retaliation Provisions, Sets up Chance for Supreme Court Review

Once upon a time, Daniel Berman was the finance director of Neo@Ogilvy LLC, a subsidiary of the publicly-traded WPP Group USA, Inc. He did not find a handsome prince or princess there. According to the allegations of a...more

9/14/2015 - Accounting Fraud Adverse Employment Action Dodd-Frank GAAP Hiring & Firing Internal Reporting Retaliation Sarbanes-Oxley SEC Whistleblower Protection Policies Whistleblowers

Executive Assistant Embezzles $1 Million from Hewlett Packard; as yet, SEC Doesn’t Care

Surely you remember the SEC’s case against Polycom from this spring. In it, the SEC alleged that Polycom CEO Andrew Miller had “created hundreds of false expense reports with bogus business descriptions for his personal use...more

9/8/2015 - Criminal Prosecution DOJ Embezzlement Fraud Hewlett-Packard Internal Controls SEC

SEC Comments on Whistleblower Anti-Retaliation Provisions/Internal Reporting

In the wake of Dodd-Frank’s passage in July 2010, many companies and corporate organizations lobbied the SEC on its upcoming whistleblower rules. One of their specific goals was to require whistleblowers, to be eligible for...more

8/24/2015 - Anti-Retaliation Provisions Dodd-Frank Employer Liability Issues Internal Reporting Publicly-Traded Companies Rule 21F SEC Whistleblower Awards Whistleblower Protection Policies

Probably Don’t Do What the Red Cross CEO Just Did

You might have read the NPR/ProPublica story from Monday about the Government Accountability Office’s investigation of the Red Cross, and CEO Gail McGovern’s attempts to end that investigation. The article says that in 2014...more

8/20/2015 - American Red Cross CEOs GAO Government Investigations Transparency Young Lawyers

The Justice Department Has Some Things to Tell You about Cybersecurity

In April the Justice Department’s Computer Crime and Intellectual Property Section issued its Best Practices for Victim Response and Reporting of Cyber Incidents. It is an excellent guide for a business organization to...more

8/17/2015 - Best Practices Cyber Attacks Cybersecurity Data Breach DOJ FBI

The SEC's Investment Management Division Has Some Things to Tell You about Cybersecurity

Lots of agencies and organizations want to boss you around about cybersecurity. In April, the SEC and the Justice Department published more directions on the issue. We’ll cover the very brief guidance issued by the SEC’s...more

7/27/2015 - Best Practices Cybersecurity DOJ Investment Adviser Investment Management New Guidance Risk Assessment SEC

You Can Settle Your Insider Trading Case with a Negligence-based Charge

This is almost certainly not true anymore. But it was true once! Maybe only once. Back in October 1991, the SEC sued Shared Medical Systems, a Pennsylvania health care information services company and three of its officers...more

7/23/2015 - Cease and Desist Enforcement Actions Insider Trading SEC Securities Act of 1933 Securities Exchange Act Settlement

Texas Supreme Court Applies Absolute Privilege to Statements in FCPA Investigations

You may remember the 2013 Texas Court of Appeals case involving Shell Oil Company and Robert Writt. We covered it here, and it left FCPA internal investigations based in Texas in an awkward spot. To recap very briefly, in...more

7/9/2015 - Absolute Privilege Books & Records Defamation DOJ FCPA Internal Investigations Oil & Gas Shell Oil TX Supreme Court

Vivek Ranadivé and Wisconsin IA Both Big into Cherrypicking, According to Sources

Here’s a thing I think I know about billionaires: They’ve made piles and piles of money doing something someone somewhere surely advised them not to do because it was a dumb idea. Then later, actually dumb ideas come along...more

7/2/2015 - Enforcement Actions Exchange-Traded Products Investment Adviser SEC

Do Investment Advisers Automatically Have Fiduciary Duties to Their Clients?

I always thought they did. But on Friday I read this sentence: “An investment advisor-client relationship is not a de jure fiduciary relationship.” It sort of jumped out at me, because for a long time I’ve assumed that an...more

6/29/2015 - Fiduciary Duty Investment Adviser Investment Management

FIN4 May Have Embarked on a Risky Hacking/Insider Trading Strategy

I haven’t yet turned to a life of crime, so far be it from me to criticize actual criminals’ profit-maximizing strategies. It’s easy for me to nitpick, but I’m not the one strapping on my mask and trying to earn a...more

6/26/2015 - Cyber Attacks Cybersecurity Data Protection Email FINRA Hackers Pharmaceutical Pharmaceutical Manufacturers

Tom Brady Better Off as a Famous Quarterback than a Registered Representative

And this is true for any number of reasons! There’s the money, the supermodel wife, the buddy trips to the Kentucky Derby . . . . All pretty obvious. But there’s another reason, too. As an NFL quarterback, Brady works...more

6/25/2015 - Deflategate FINRA NFL Registered Representatives Tom Brady

Why Did BHP Billiton Settle an FCPA Case Including 7+ Year-Old Conduct?

Remember the Water Cube from the 2008 Olympics in Beijing? BHP Billiton has probably had reason to think about it recently. On Wednesday it settled an FCPA case with the SEC arising out of the company’s sponsoring the...more

5/22/2015 - Books & Records Bribery Enforcement Actions FCPA Foreign Official Internal Controls Olympics SEC Statute of Limitations

D.C. Circuit Says “Heads I Win, Tails You Lose” Is Maybe Not the Best Set of Rules for Criminal Forfeiture

If you’re a federal prosecutor, you have a lot of tools at your disposal. Crimes waiting to be indicted are abundant. If you’re having trouble getting a defendant sentenced as a career offender, you can see if he fits as a...more


Insider Trading Recklessness and Kevin Love’s Shoulder

A couple of weeks ago I expressed skepticism about the ultimate impact of Judge Rakoff’s recent opinion in SEC v. Payton. In it, he held that for purposes of a motion to dismiss, the SEC had adequately alleged insider...more

5/6/2015 - Illegal Tipping Insider Trading Intent Judge Rakoff Personal Benefit SEC SEC v Payton

The SEC Doesn’t Love Secret Perks for Executives

If you find yourself as the CEO of a public company, you’ll probably find pluses and minuses. You’ll have to work really hard, but it can be lucrative, too. You can get paid a lot of money. And your company can pay you...more

4/28/2015 - C-Suite Executives CEOs Enforcement Actions Executive Compensation Internal Controls Publicly-Traded Companies SEC

Two Regulatory Crises

It strikes me that two civil regulators are facing dire attacks on aspects of their enforcement programs – both in different U.S. Courts of Appeals – at the same time. Both of these attacks arise out of generalized statutes...more

4/21/2015 - Appeals Cybersecurity Data Breach Enforcement Actions FTC FTC v Wyndham Illegal Tipping Insider Trading SEC Unfair or Deceptive Trade Practices US v Newman

A Non-Insider Trading Case in the District of Massachusetts

Insider trading prosecutions can be difficult. Because of the haphazard and tortuous growth of insider trading law itself, the prosecutions involve proving lots of different pesky elements. Fiduciary duties, materiality,...more

4/20/2015 - C-Suite Executives Confidential Information Criminal Prosecution FINRA Insider Trading Mail Fraud Retailers SEC Supply Chain Wire Fraud

Three Thoughts about the SEC’s First “Pretaliation” Case

I was on a flight last Wednesday when the SEC released the first of what whistleblower chief Sean McKessy has dubbed “pretaliation” cases against KBR, Inc. When I landed I had several emails from colleagues, asking, “Did you...more

4/10/2015 - Confidentiality Agreements Corporate Counsel Enforcement Actions Internal Investigations KBR (formerly Kellogg Brown & Root) Rule 21F SEC Securities Exchange Act Whistleblower Protection Policies Whistleblowers

FINRA Issues Report on Cybersecurity Practices

Following up on our post from last week on the SEC’s cybersecurity exam sweep, you should also know about FINRA’s recent report on this area. Last month, FINRA published a Report on Cybersecurity Practices that really could...more

3/24/2015 - Cybersecurity FINRA Information Reports

SEC Releases Results of Cybersecurity Exam Sweep

We’re a bit behind on this, but better (a little bit) late than never. Last month the SEC’s Office of Compliance, Inspections and Examinations released the first results of its Cybersecurity Examination Initiative, announced...more

3/17/2015 - Broker-Dealer Compliance Cybersecurity FFIEC FinCEN Industry Examinations Investment Adviser NIST OCIE SAR SEC

The SEC Will Be Your Employment Law Agency, Too

The nature of the SEC’s business a regulator of public companies lends a certain expansive aspect to its jurisdiction. That is, when your job as a government agency is to be sure public companies are making complete and...more

3/3/2015 - Employer Liability Issues Jurisdiction Publicly-Traded Companies SEC Severance Agreements Whistleblowers

SIFMA Gets Its Cybersecurity-Antitrust Wish

I’m sure you remember SIFMA’s Principles for Effective Cybersecurity Regulatory Guidance, issued last October. I mean, you read about them right here. One of the principles was this: Principle 9: Information Sharing...more

3/2/2015 - Cybersecurity Information Sharing SIFMA

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