Jon Eisenberg

Jon Eisenberg

K&L Gates LLP

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Latest Publications


12 AML Obligations Every Broker/Dealer Needs to Know

Since 2002, as part of their anti-money laundering (“AML”) responsibilities, broker/dealers have had a gatekeeper-like obligation to monitor customers for “suspicious” activities and to report those activities to the Treasury...more

9/16/2016 - Anti-Money Laundering Broker-Dealer FinCEN FINRA SEC Suspicious Activity Reports

Government Urges the Supreme Court to Significantly Expand Insider Trading Liability

Two years ago, the Second Circuit Court of Appeals dealt the government a stinging defeat in United States v. Newman, an insider trading case that the government stated “will dramatically limit the Government’s ability to...more

8/9/2016 - Certiorari Confidential Information Corporate Counsel Dirks v SEC Insider Trading SEC US v Newman US v Salman

Recent Criticisms of the SEC: Fair or Unfair?

Over the last few years, the SEC has been criticized for (1) failing to “consistently and aggressively enforce the securities laws and protect investors and the public,” (2) obtaining sanctions that amount to only a slap on...more

5/9/2016 - Enforcement Actions Financial Institutions Hedge Funds Sanctions SEC

D.C. Circuit Appears Poised to Overturn First CFPB Enforcement Action to Reach the Court: Five Key Takeaways From Yesterday’s Oral...

Major financial firms almost never litigate with their regulators. As a result, regulators often take aggressive enforcement positions with little fear of judicial scrutiny. That’s been especially true for the Consumer...more

4/15/2016 - Administrative Appeals ALJ Appeals CFPB Corporate Counsel Disgorgement Due Process Enforcement Actions Fair Notice Financial Institutions Mortgage Lenders Popular RESPA Rule of Lenity Separation of Powers Statute of Limitations

Heard at the 2016 SIFMA Conference

Recently, attorneys from K&L Gates’ Government Enforcement practice group attended the Securities Industry and Financial Markets Association’s (“SIFMA”) Compliance and Legal Society Annual Seminar. We wanted to share with you...more

3/31/2016 - Best Interest Contract Exemptions BSA/AML CFTC CMBS Corporate Crimes Cybersecurity DOJ DOL ERISA FCPA Fiduciary Duty FINRA Halliburton v Erica P. John Fund Individual Accountability Public Offerings Retirement SEC Self-Disclosure Requirements Self-Reporting SIFMA Toys R Us

Thirteen Observations About the SEC’s Enforcement Program

Over the last two months, the SEC issued two reports that provide useful perspectives on its enforcement program. In February, it issued the combined 136-page “FY 2017 Congressional Justification & FY 2015 Annual Performance...more

3/29/2016 - Broker-Dealer Corporate Counsel Disgorgement Enforcement Actions Investment Adviser Investment Companies Penalties SEC Securities Fraud Young Lawyers

One Year Later: Omnicare’s Effect on Opinion Liability

One year ago today, in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, 135 S.Ct. 1318 (2015), the Supreme Court created a new test for opinion liability under Section 11 of the Securities Act,...more

3/28/2016 - Corporate Counsel Material Misstatements Omnicare v Laborers District Council Pharmaceutical Industry Registration Statement SCOTUS Section 11 Securities Act of 1933 Securities Litigation Statement of Opinion

Calculating SEC Civil Money Penalties: Do Hundreds of Related Acts Constitute a Single Course of Conduct or Hundreds of Separate...

In addition to going to court to seek sanctions, the Securities and Exchange Commission may impose civil money penalties in its own administrative proceedings on any person who violates, or causes a violation of, the federal...more

1/20/2016 - Administrative Proceedings Civil Monetary Penalty Corporate Counsel Misrepresentation SEC Securities Violations

The Year in Review: 2015 FINRA Enforcement Actions

Over the past several years, the Financial Industry Regulatory Authority (“FINRA”), the self-regulatory organization responsible for regulating every brokerage firm and broker doing business with the U.S. public, brought...more

1/7/2016 - Anti-Money Laundering Broker-Dealer Collateralized Loan Obligations Enforcement Actions Financial Sector FINRA Negligent Misrepresentation REIT Restitution Sanctions Securities Fraud

The Year in Review: Ten Trends in SEC Enforcement Actions

As 2015 winds down, we offer the following observations about 10 important trends in SEC enforcement actions. 1. Increased Number of Enforcement Actions - The number of SEC enforcement actions continues to grow. In FY 2015,...more

12/17/2015 - ALJ Big Data Broker-Dealer Enforcement Actions SEC

SEC Enforcement Actions Against Broker-Dealers

In its 2015 Financial Report, the SEC repeated its view that one of the two principal purposes of the Securities Act of 1933 and the Securities Exchange Act of 1934 is to ensure that “people who sell and trade securities —...more

12/9/2015 - Broker-Dealer Enforcement Actions FCPA SEC Trading Platforms

SEC Enforcement Actions Against Investment Advisers

According to the SEC’s most recent financial report, as of August 2014, SEC-registered investment advisers managed $62.3 trillion in assets. Not surprisingly, investment advisers attract a great deal of attention from the...more

10/22/2015 - Capital Gains Chief Compliance Officers Compliance Conflicts of Interest Cybersecurity Disclosure Enforcement Actions Federal Rule 12(b)(1) Fees Investment Investment Adviser Investment Advisers Act of 1940 Investment Company Act of 1940 Investment Management Mutual Funds SEC Transparency Directive Valuation

Are Public Companies Required to Disclose that the Government is Investigating Them?

For many public companies, the first issue they have to confront after they receive a government subpoena or Civil Investigative Demand (“CID”) is whether to disclose publicly that they are under investigation. Curiously, the...more

7/14/2015 - Accounting Standards CFPB CID Compliance Corporate Counsel Disclosure Requirements Dodd-Frank DOE DOJ False Claims Act (FCA) Form 10-K Form 8-K FTC Government Investigations Investigations Popular Publicly-Traded Companies Regulation S-K Rule 10b-5 SEC Securitization Stocks Subpoenas Young Lawyers

“Friends” Who Trade on Inside Information: How United States v. Newman Changes the Law

In unsuccessfully seeking rehearing in United States v. Newman, 773 F.3d 438 (2d Cir. 2014), reh’g denied, Nos. 13-1837, 13-1917 (2d Cir. Apr. 3, 2015), the government acknowledged that the Second Circuit’s recent decision in...more

4/22/2015 - Illegal Tipping Insider Trading Material Nonpublic Information Personal Benefit Petition For Rehearing Quid Pro Quo SEC Securities Securities Fraud US v Newman

Supreme Court’s Omnicare Decision Muddies Section 11 Opinion Liability Standards

The Supreme Court has a long history of rejecting expansive interpretations of implied private rights of action under Section 10(b) of the Securities Exchange Act. Most notably, since 1975, it rejected the argument that mere...more

3/31/2015 - Legal History Material Misstatements Omnicare Omnicare v Laborers District Council Private Right of Action Registration Statement SCOTUS Section 10(b) Section 11 Securities Act of 1933 Securities Exchange Act

2014 SEC and FINRA Enforcement Actions Against Broker-Dealers and Investment Advisers

The sheer number of enforcement actions brought against broker-dealers and investment advisers makes it challenging to keep up. In this alert, we divide this year’s most important cases against broker-dealers and investment...more

12/3/2014 - Broker-Dealer Business Valuations Cybersecurity Enforcement Actions FINRA High Frequency Trading Insider Trading Investment Adviser IPO Market Manipulation Municipal Bonds Pay-To-Play Ponzi Scheme Recordkeeping Requirements SEC Strategic Enforcement Plan Whistleblowers

A Hard Rain Has Started to Fall, A Product-by-Product Review of the CFPB’s First 60 Enforcement Actions

Between July 17, 2012 and October 9, 2014, the Consumer Financial Protection Bureau brought 60 enforcement actions. According to our unofficial tally, they resulted in settlements requiring the payment of $2.2 billion in...more

11/14/2014 - Automotive Loans CFPB Checking Accounts Civil Monetary Penalty Credit Cards Debt Collection Enforcement Actions Higher-Priced Mortgage Loans Mortgage Servicers Payday Loans Referral Fees Student Loans

Successful Motions to Dismiss Securities Class Actions, A Review of What Worked in 2014

Motions to dismiss have been called “the main event” in securities class actions. They are filed in over 90% of securities class actions and they result in dismissal close to 50% of the time they are filed. In contrast, out...more

11/10/2014 - Class Action Class Certification Defense Strategies Motion to Dismiss Securities Securities Act of 1933 Securities Exchange Act Settlement

Hedge Funds and Material Nonpublic Information: The Role of Deception, Duty, Breach, Personal Benefit and Knowledge in Creating...

The last thing hedge funds need is another wake up call about the risks of liability for trading on the basis of material nonpublic information. But if they did, a July 17 article in the Wall Street Journal would provide it....more

7/25/2014 - Breach of Duty Conflicts of Interest Corporate Counsel Fiduciary Duty Hedge Funds Material Nonpublic Information SEC

Individual Liability in CFPB Enforcement Proceedings

To date, the CFPB has brought 12 cases—out of more than three dozen total CFPB enforcement cases—in which it named individuals as defendants or respondents liable for violations of consumer protection statutes. Below, we...more

5/29/2014 - C-Suite Executives CFPB Consumer Protection Act D&O Insurance Debt-Relief Industry Directors Dodd-Frank DOJ Enforcement Enforcement Actions Independent Contractors Liability Insurance Partnerships Personal Liability RESPA Shareholders U.S. Treasury

Surviving in an Age of Individual Accountability: How Much Protection Do Indemnification and D&O Insurance Provide?

We consider below how advancement of legal fees, indemnification, and insurance operate when officers and directors become involved in regulatory investigations and proceedings. Part I addresses the enhanced risk officers and...more

5/24/2014 - Bylaws Corporate Officers Corruption D&O Insurance Directors Government Investigations Indemnification Individual Accountability Legal Costs SEC

Allegations Of Collusion Among Financial Institutions—Where We’ve Been, Where We Are, What We’ve Learned

Over the last 15 years, financial institutions have paid billions of dollars to settle claims that they colluded with each other. Below, we discuss four separate matters, beginning with the Nasdaq spread cases in the late...more

4/1/2014 - CFTC Class Action Collusion DOJ FBI Financial Institutions Foreign Exchanges Municipal Bonds Nasdaq SEC

We’ve Only Just Begun - Lessons From the CFPB’s First 35 Enforcement Cases

Few agencies have generated as much controversy as the Consumer Financial Protection Bureau. The brainchild of Senator Elizabeth Warren when she was still a professor and the product of the Dodd-Frank Wall Street Reform and...more

3/7/2014 - CFPB Dodd-Frank Elizabeth Warren Fair Lending SEC Unfair or Deceptive Trade Practices

Brother Can You Spare $8.9 Billion? Making Sense of SEC Civil Money Penalties

If you or your company has ever been involved in a long SEC enforcement investigation, you’ve probably gone through the five stages of grief?denial that you did anything wrong, anger that the enforcement lawyers are pursuing...more

2/13/2014 - Civil Monetary Penalty DOJ Enforcement Actions SEC

In Mary Jo White’s Own Words: Ten Changes to Expect from the SEC’s New Enforcement Program

Investors, borrowers, financial institutions, and the economy were not the only casualties of the financial crisis. Regulators were casualties too, and the SEC was one of the hardest hit. Two Harris Polls—one conducted in...more

1/14/2014 - Compliance Enforcement Mary Jo White SEC

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