In an unintended consequence of the Securities and Exchange Commission's (SEC) unprecedented rulemaking agenda, a black-hat hacker gang has filed a whistleblower complaint against its victim for not reporting a cybersecurity...more
In September, the Securities Exchange Commission’s new Cybersecurity Rule for reporting public companies became effective. The SEC Cybersecurity Rule applies to public companies and generally requires (1) disclosure of...more
9/29/2023
/ Corporate Governance ,
Cyber Incident Reporting ,
Cybersecurity ,
Disclosure Requirements ,
Financial Industry Regulatory Authority (FINRA) ,
Form 8-K ,
New Rules ,
Popular ,
Publicly-Traded Companies ,
Reporting Requirements ,
Securities and Exchange Commission (SEC)
A panel of the D.C. Circuit recently relied on Lucia and Cochran to enjoin a FINRA regulatory enforcement action pending appeal of an Appointments Clause challenge....more
8/21/2023
/ Administrative Law Judge (ALJ) ,
Appointments Clause ,
Article II ,
Article III ,
Constitutional Challenges ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Regulatory Reform ,
Motion To Enjoin ,
Popular ,
Regulatory Agencies ,
Regulatory Authority ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Seventh Amendment ,
Standing
On August 10, 2023, the Securities Industry and Financial Markets Association (“SIFMA”) – a leading Wall Street industry association – filed suit to enjoin new Missouri regulations requiring investment advisors (“IA’s”) and...more
8/15/2023
/ Broker-Dealer ,
Capital Markets ,
Employee Retirement Income Security Act (ERISA) ,
Environmental Social & Governance (ESG) ,
Financial Services Industry ,
First Amendment ,
Investment ,
Investment Adviser ,
Investment Management ,
NSMIA ,
Preemption ,
Securities Regulation ,
SIFMA ,
State Regulators
On June 20, 2023, the Supreme Court granted certiorari to review three questions about the Securities and Exchange Commission’s (SEC’s) administrative courts...more
7/6/2023
/ Administrative Law Judge (ALJ) ,
Appointments Clause ,
Article II ,
Certiorari ,
Disgorgement ,
Enforcement Actions ,
Investment Adviser ,
Investment Funds ,
Public Rights Doctrine ,
SCOTUS ,
Securities and Exchange Commission (SEC)
Last week, a divided Securities and Exchange Commission adopted a set of rule changes requiring next-day (T+1) settlement of most equity trades by May 24, 2024. The suite of rules also require same-day trade allocations and...more
Every year the Financial Institution Regulatory Authority (FINRA) issues its “Report on FINRA’s Examination and Risk Monitoring Program.” The Report covers issues noted during the prior year’s exams and topics that examiners...more
1/13/2023
/ Anti-Money Laundering ,
Best Execution ,
Books & Records ,
Cryptocurrency ,
Examination Priorities ,
Financial Crimes ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Form CRS ,
Market Manipulation ,
Regulation Best Interest ,
Securities Transactions ,
Variable Annuities
Last January, an aggressive bid to vacate an arbitration defeat raised claims that a large bank’s brokerage unit and its counsel manipulated FINRA’s arbitrator-selection process through a “secret agreement.” The Georgia...more
On July 27, 2022, FINRA filed a proposed rule change with the SEC that would “modernize” its supervision rule to make permanent pandemic-related temporary exemptions that allowed limited-scope work-from-home (“WFH”) for...more
On June 29, 2022, FINRA released the report of its independent investigation, concluding that allegations of a “secret agreement” to avoid certain arbitrators on an industry lawyer’s cases were untrue.
The allegations...more
6/30/2022
/ Administrative Review ,
Appeals ,
Arbitration ,
Arbitration Awards ,
Banks ,
Brokerage Accounts ,
Financial Industry Regulatory Authority (FINRA) ,
Forum ,
Professional Misconduct ,
Securities Litigation ,
Vacatur ,
Wells Fargo
A unanimous Supreme Court held May 23 that a party’s waiver of its arbitration right does not require showing prejudice to an opposing party, because the Federal Arbitration Act (“FAA”) prohibits arbitration-specific rules....more
5/31/2022
/ Arbitration ,
Arbitration Agreements ,
Employment Litigation ,
Federal Arbitration Act ,
Morgan v Sundance ,
Motion to Compel ,
Prejudice ,
Remand ,
Reversal ,
SCOTUS ,
Securities Litigation ,
Wage and Hour ,
Waivers
In its April 27 Weekly Update, the Financial Industry Regulatory Authority’s (“FINRA”) National Cause and Financial Crimes Detection program urged FINRA member firms to review a cyber-threat alert arising from Russia’s...more
4/29/2022
/ Critical Infrastructure Sectors ,
Cyber Threats ,
Data Protection ,
Distributed Denial of Service ,
Financial Crimes ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Services Industry ,
Homeland Security Cybersecurity & Infrastructure Security Agency (CISA) ,
Information Technology ,
Malware ,
Military Conflict ,
Risk Management ,
Russia ,
Ukraine ,
Vulnerability Assessments
On March 31, 2022, the Securities Industry and Financial Markets Association (“SIFMA”) released its after-action report on Quantum Dawn VI – a global financial-markets cybersecurity exercise....more
The U.S. Supreme Court held March 31, 2022, that the Federal Arbitration Act (“FAA”) does not allow federal courts to “look through” to the dispute underlying an arbitration to establish jurisdiction to confirm or vacate an...more
In the securities industry, regulators like to say that the compliance professionals are their “partners.” But every so often, those regulators charge one of their compliance partners with rule violations. The compliance...more
3/23/2022
/ Chief Compliance Officers ,
Compliance Management Systems ,
Cooperative Compliance Regime ,
Corporate Management ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Lead Supervisory Authority ,
Personal Liability ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Securities Violations
Continuing its active regulatory agenda, the Securities and Exchange Commission on March 9, 2022, proposed new cybersecurity regulations for reporting public companies. Although couched as a series of “disclosure”...more
3/10/2022
/ Corporate Governance ,
Cybersecurity ,
Data Breach ,
Data Privacy ,
Disclosure Requirements ,
Policies and Procedures ,
Proposed Rules ,
Publicly-Traded Companies ,
Regulatory Agenda ,
Risk Management ,
Securities and Exchange Commission (SEC) ,
Securities Regulation
The regular “Weekly Update” email from the Financial Industry Regulatory Authority (“FINRA”) had an eye-catching warning February 16, urging broker-dealer member firms to heed the “Shields Up” cyber threat warning from the...more
2/17/2022
/ Critical Infrastructure Sectors ,
Cyber Attacks ,
Cyber Crimes ,
Cyber Threats ,
Cybersecurity ,
Data Breach ,
Data Protection ,
FBI ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Hackers ,
Homeland Security Cybersecurity & Infrastructure Security Agency (CISA) ,
New Guidance ,
Personally Identifiable Information ,
Russia ,
Threat Management ,
Vulnerability Assessments
In the 1920s, Wall Street cleared and settled trades by the end of the day after the trade instruction (“T+1”). Over the years, that cycle bloated to T+4, to T+3 in 1993, and then T+2 in 2017. Last week, the SEC proposed to...more
2/15/2022
/ Blockchain ,
Broker-Dealer ,
Capital Markets ,
Distributed Ledger Technology (DLT) ,
Peer-to-Peer ,
Proposed Rules ,
Regulatory Agenda ,
Regulatory Reform ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Securities Settlement Cycles ,
Securities Transactions
On February 9, the SEC proposed new cybersecurity risk management regulations for investment advisers, registered investment companies (funds), and business development companies....more
2/14/2022
/ Anti-Fraud Provisions ,
Business Development Companies ,
Comment Period ,
Cybersecurity ,
Data Protection ,
Disclosure Requirements ,
Fiduciary Duty ,
Identity Theft ,
Investment Adviser ,
Investor Protection ,
Policies and Procedures ,
Proposed Rules ,
Registered Investment Companies (RICs) ,
Regulatory Agenda ,
Risk Management ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Securities Regulation
Over the last couple of decades, the securities self-regulatory organization FINRA (f/k/a NASD) informs its membership each year of what compliance risks are noted by its examination program. Those are risks firms should...more
2/10/2022
/ Anti-Money Laundering ,
BSA/AML ,
Capital Raising ,
Compliance Monitoring ,
Crowdfunding ,
Cybersecurity ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Markets ,
Form CRS ,
Influencers ,
Municipal Securities Market ,
Regulation BI ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC) ,
Special Purpose Acquisition Companies (SPACs)
Requiescat Diem. Launched with great fanfare three years ago as Libra, the Facebook/Meta-led blockchain stablecoin effort now called Diem announced January 31 that it will shut down and sell its assets to Silvergate Capital...more
The Financial Crimes Enforcement Network (“FinCEN”) unit of the U.S. Department of the Treasury called this week for the nation’s financial institutions to be on the lookout for money flows indicative of environmental crimes....more
Resources -
What We Do And Don’t Know About The New COVID-19 Vaccination Mandates -
Since President Biden’s announcement on September 9, 2021 of plans for COVID-19 vaccination and/or weekly testing mandates, we have...more
11/1/2021
/ Business Licenses ,
Coronavirus/COVID-19 ,
Employer Mandates ,
Enforcement Actions ,
Federal Acquisition Regulations (FAR) ,
Federal Contractors ,
Gamification ,
Infectious Diseases ,
Regulation Best Interest ,
Safety Standards ,
Securities and Exchange Commission (SEC) ,
Securities Transactions ,
Vaccinations ,
Workplace Safety
In remarks this week at SEC Speaks, SEC Investor Advocate Rick Fleming mused that the “gamification” of securities trading might pose an undue risk that exploits a potential loophole in Regulation Best Interest (“Reg. BI”)....more
10/15/2021
/ Broker-Dealer ,
Cryptocurrency ,
GameStop ,
Gamification ,
Internet Memes ,
Investment Management ,
Regulation Best Interest ,
Regulation BI ,
Retail Investors ,
Securities and Exchange Commission (SEC) ,
SIFMA ,
Social Media ,
Stock Trades ,
Trading Policies
In remarks this week at the SEC Speaks conference, new SEC Enforcement Director Gurbir Grewal said he’s bringing back admissions in SEC settled actions to help spur accountability. Most SEC actions are settled on a “neither...more