On November 8, the SEC filed its first settled enforcement action against cryptocurrency trading platform for operating as an unregistered exchange trading securities, in violation of the Securities Exchange Act of 1934....more
11/19/2018
/ Cryptocurrency ,
Cyber Crimes ,
Digital Currency ,
Enforcement Actions ,
Financial Markets ,
Initial Coin Offering (ICOs) ,
Investment Opportunities ,
Regulatory Oversight ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Token Sales ,
Unregistered Securities ,
Virtual Currency
Frank Borger-Gilligan, Tennessee’s chief securities regulator, last week was selected as President-Elect of the North American Securities Administrators Association (“NASAA”) at the annual meeting in Anchorage, Alaska. ...more
So maybe it’s not such a good idea for a volatile, impulsive chief executive to use his personal Twitter account to announce major policy shifts. No, no – not that one....more
10/2/2018
/ Automotive Industry ,
Elon Musk ,
Embedded Tweets ,
Enforcement Actions ,
Going-Private Transactions ,
Internal Controls ,
Publicly-Traded Companies ,
Rule 10b-5 ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Violations ,
Social Media ,
Stock Prices ,
Tesla ,
Twitter
After Bitfinex, the CFTC issued its Proposed Interpretation on “Retail Commodity Transactions Involving Virtual Currency.” Proposed Interpretation, 82 Fed. Reg. 60335 (CFTC Dec. 20, 2017). Although the comment period closed...more
9/19/2018
/ Bitcoin ,
Blockchain ,
CFTC ,
Commodities ,
Cryptocurrency ,
Digital Currency ,
Distributed Ledger Technology (DLT) ,
Financial Instruments ,
Financial Markets ,
Initial Coin Offering (ICOs) ,
Interpretive Opinions ,
Jurisdiction ,
Popular ,
Regulatory Oversight ,
Token Sales ,
Virtual Currency
In a series of 2015 decisions, the CFTC determined that virtual currency is a commodity subject to its jurisdiction.
In a 2016 settled enforcement action, the CFTC took the position that an unregistered platform...more
9/18/2018
/ Bitcoin ,
Blockchain ,
CFTC ,
Commodities ,
Cryptocurrency ,
Digital Currency ,
Distributed Ledger Technology (DLT) ,
Financial Instruments ,
Financial Markets ,
Initial Coin Offering (ICOs) ,
Jurisdiction ,
Regulatory Oversight ,
Token Sales ,
Virtual Currency
The 2011 Dodd-Frank Act amended the CFTC’s jurisdiction to authorize regulation of “retail commodity transactions offered ‘on a leveraged or margined basis, or financed by the offeror, the counterparty, or a person acting in...more
9/17/2018
/ Bitcoin ,
Blockchain ,
CFTC ,
Commodities ,
Cryptocurrency ,
Digital Currency ,
Distributed Ledger Technology (DLT) ,
Financial Instruments ,
Financial Markets ,
Initial Coin Offering (ICOs) ,
Jurisdiction ,
Popular ,
Regulatory Oversight ,
Token Sales ,
Virtual Currency
Prior to Dodd-Frank, the CFTC and Courts recognized a distinction between traded futures contracts subject to CFTC jurisdiction and individualized non-exchange-traded contracts for the present sale of a cash commodity for...more
On September 11, FINRA announced its filing of an enforcement action accusing a Massachusetts broker of fraud and registration violations arising from his sale of an unregistered cryptocurrency, “HempCoin.” It is FINRA’s...more
On September 11, the SEC announced a pair of settled cryptocurrency enforcement actions. The first was against an unregistered digital-asset hedge fund. The second shut down an “ICO Superstore” as an unregistered...more
9/12/2018
/ Broker-Dealer ,
Cryptocurrency ,
Digital Currency ,
Enforcement Actions ,
Initial Coin Offering (ICOs) ,
Investment ,
Investment Company Act of 1940 ,
Investment Products ,
Offerings ,
Securities and Exchange Commission (SEC) ,
Token Sales ,
Unregistered Securities ,
Virtual Currency
This is Part 3 of a seven-part series of posts looking at some broad legal issues affecting crypto-currencies.
...more
9/12/2018
/ Bitcoin ,
Blockchain ,
Commodities ,
Cryptocurrency ,
Digital Currency ,
Distributed Ledger Technology (DLT) ,
Exchange-Traded Products ,
Financial Instruments ,
Financial Markets ,
Financial Transactions ,
Initial Coin Offering (ICOs) ,
Investment ,
Jurisdictional Determination (JD) ,
Money Transmitter ,
Popular ,
Regulatory Oversight ,
Retail Investors ,
Token Sales ,
Trading Platforms ,
Virtual Currency
This is Part 2 of a seven-part series of posts looking at some broad legal issues affecting crypto-currencies.
State and federal regulators, especially the SEC, have moved aggressively to halt unregistered initial coin...more
9/12/2018
/ Bitcoin ,
Cryptocurrency ,
Digital Currency ,
Disclosure Requirements ,
Enforcement Authority ,
Financial Instruments ,
Initial Coin Offering (ICOs) ,
Investment ,
Investment Contract ,
Popular ,
Registration Requirement ,
Regulatory Oversight ,
Regulatory Standards ,
Token Sales ,
Unregistered Securities ,
Virtual Currency
This is Part 1 of a seven-part series of posts looking at some broad legal issues affecting crypto-currencies.
DLT vs Territorial Law.
Fiat currencies have declared value stemming from governmental regulation. ...more
9/4/2018
/ Administrative Authority ,
Bitcoin ,
Blockchain ,
Cryptocurrency ,
Digital Currency ,
Distributed Ledger Technology (DLT) ,
Extraterritoriality Rules ,
Financial Regulatory Agencies ,
Forum Non Conveniens ,
Initial Coin Offering (ICOs) ,
Personal Jurisdiction ,
Popular ,
Regulatory Oversight ,
Virtual Currency
FINRA recently proposed to remove the broker’s “control” of a securities account as a required element of a “quantitative suitability” violation under Rule 2111....more
A unanimous Supreme Court recently held that “covered class actions” over exchange-traded securities are not removable from state courts under SLUSA when they assert only ‘33 Act claims....more
It was the Ides of March for the Obama Administration’s “fiduciary duty rule” that sought to remake much of nation’s financial markets by back-door regulation of anyone dealing with IRA investors. The US Fifth Circuit...more
3/20/2018
/ Best Interest Contract Exemptions ,
Conflicts of Interest ,
Consumer Financial Products ,
Department of Labor (DOL) ,
Employee Benefits ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Fiduciary Rule ,
Financial Services Industry ,
Individual Retirement Account (IRA) ,
Investment Adviser ,
Investment Management ,
Regulatory Oversight ,
Retirement Plan ,
Vacated
Last week, the unanimous Supreme Court clarified that the “clearing and settlement” exception to a bankruptcy trustee’s avoiding powers covers only payments “to,” not merely through, financial market participants....more
3/6/2018
/ Avoidance ,
Bankruptcy Code ,
Chapter 11 ,
Commercial Bankruptcy ,
Debtors ,
Financial Institutions ,
Fraudulent Transfers ,
Intermediaries ,
Merit Management Group v FTI Consulting ,
Safe Harbors ,
SCOTUS ,
Section 546(e) ,
Split of Authority ,
Trustees
In a triumph of positive statutory law over Chevron deference to the administrative state, the unanimous Supreme Court held this week that Dodd-Frank whistleblower protections require SEC reporting, because the statute...more
2/23/2018
/ Anti-Retaliation Provisions ,
Digital Realty Trust Inc v Somers ,
Dodd-Frank ,
Internal Reporting ,
Reporting Requirements ,
Retaliation ,
Sarbanes-Oxley ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Whistleblower Protection Policies ,
Whistleblowers
After several years of examination focus and a series of enforcement actions, the SEC’s Enforcement Division on February 12 announced a “Share Class Selection Disclosure Initiative” in an attempt to level-set industry...more
A pair of FINRA Rule revisions designed to protect seniors from financial exploitation become effective February 5. The Rules require member firms to obtain “Trusted Contact Person” information and impose short...more
1/29/2018
/ Amended Rules ,
Elder Abuse ,
Elder Issues ,
Exploitation ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Services Industry ,
Fraud and Abuse ,
Investment Management ,
Regulatory Oversight ,
Securities and Exchange Commission (SEC) ,
Vulnerable Victims ,
Wealth Management
On January 12, the US Supreme Court agreed to review the constitutionality of the SEC’s administrative law judges.
On November 29, 2017, the SEC did an abrupt about-face, telling the Court it now regards its ALJs as...more
The Sixth Circuit recently affirmed that failure-to-supervise claims against a brokerage firm over outside business activities it knew nothing about nevertheless were arbitrable under FINRA Rule 12200(2) as “arising in...more
On November 29, the SEC did an about-face and admitted its ALJs are “inferior officers” (not merely employees) subject to the Constitution’s Article II appointment provisions. The Solicitor General’s brief on behalf of the...more
Morgan Stanley announced October 30 that it would exit the Protocol for Broker Recruiting, as part of strategy “to refocus [recruiting] resources on existing talent.”...more
The Tennessee Supreme Court recently held that Tennessee’s Trust Code and broad trust-instruments authorize a Trustee’s execution of a pre-dispute arbitration clause. That isn’t a per se breach of fiduciary duty, but the...more
10/26/2017
/ Appeals ,
Arbitration ,
Arbitration Agreements ,
Beneficiaries ,
Binding Arbitration ,
Breach of Duty ,
Fiduciary Duty ,
Financial Adviser ,
Motion to Compel ,
Non-Signatories ,
Pre-Dispute Arbitration ,
Reversal ,
Securities Litigation ,
Third-Party Beneficiaries ,
TN Supreme Court ,
Trustees ,
Trusts
Cut, paste and forward ? just as the boss instructed. But Lorenzo’s email to two clients was misleading, so the SEC filed an enforcement action. The ALJ held Lorenzo liable for violating anti-fraud provisions and imposed a...more
10/23/2017
/ Administrative Law Judge (ALJ) ,
Anti-Fraud Provisions ,
Appeals ,
Enforcement Actions ,
False Statements ,
Interstate Commerce ,
Investment Schemes ,
Makers ,
Regulatory Violations ,
Rule 10b-5 ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation