In an Opinion highlighting the Circuit split over the constitutionality of SEC administrative law judges (“ALJs”), the Fifth Circuit recently stayed an FDIC civil-penalty and bar order against a Bank director, pending...more
The Department of Labor has received OMB certification, and sought expedited notice-and-comment, for a rule change that would postpone the full implementation deadline for its Fiduciary Rule from January 1, 2018 until July 1,...more
9/1/2017
/ Best Interest Contract Exemptions ,
Conflicts of Interest ,
Department of Labor (DOL) ,
Employee Benefits ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Fiduciary Rule ,
Investment Adviser ,
Investment Management ,
OMB ,
Retirement Plan
A Second Circuit Panel held that the Supreme Court’s Salman decision abrogated the Circuit’s Newman requirement of a “close personal relationship” under the “gift theory” of insider-trading; the dissent claims the Panel...more
8/25/2017
/ Breach of Duty ,
Dirks v SEC ,
Fiduciary Duty ,
Illegal Tipping ,
Insider Trading ,
Jury Instructions ,
Martoma ,
Personal Benefit ,
Securities Fraud ,
Special Relationship ,
US v Newman ,
US v Salman
Trader Joseph Ruggieri finally prevailed last week, when SEC Commissioners Stein and Piwowar split on whether Enforcement proved his four trades (in 2010-2011) were made on inside information....more
Last week, the MSRB issued “guidance” on the application of Rule G-42 conduct standards for Municipal Advisors in conduit issues. The “guidance” highlights ambiguities from the “for or on behalf” language in the MA Rule when...more
The Sixth Circuit Court of Appeals dismissed a suit by the Tennessee, Georgia and New York Republican parties challenging the constitutionality of an MSRB extending pay-to-play prohibition to municipal advisors. The Court...more
7/14/2017
/ Article III ,
Constitutional Challenges ,
Dodd-Frank ,
Financial Institutions ,
MSRB ,
Municipal Advisers ,
Municipal Securities Market ,
Pay-To-Play ,
Regulatory Oversight ,
Rule G-37 ,
Standing
A unanimous Supreme Court held June 5 that SEC disgorgement is a “penalty” subject to five-year limitations under 28 U.S.C. §2462 and Gabelli v. SEC, 568 U.S. 442 (2013)(5-year limitations applies to civil monetary...more
Last week Labor Secretary Acosta chose a Wall Street Journal op-ed to announce DOL’s decision not to delay the “fiduciary rule” past the once-extended June 9 effective date....more
On June 1, new SEC Chair Clayton returned the SEC to the arena in the policy debate surrounding the DOL’s Fiduciary Rule. Clayton’s public statement responded to a direct invitation for SEC participation by DOL Secretary...more
6/2/2017
/ Best Interest Contract Exemptions ,
Comment Period ,
Conflicts of Interest ,
Department of Labor (DOL) ,
Dodd-Frank ,
Employee Benefits ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Fiduciary Rule ,
Financial Institutions ,
Investment Adviser ,
Retirement Plan ,
Securities and Exchange Commission (SEC)
Finally, there’s voice of reason entering the policy harangue over the Department of Labor’s Fiduciary Rule … even if it’s coming through an unusual outlet. In a May 23 Wall Street Journal opinion piece, new Labor Secretary...more
On Monday, May 22, the SEC stayed all its administrative proceedings assigned to an ALJ in which a Respondent has an option for review by the 10th Circuit. (Securities laws provide appellate review of SEC administrative...more
The Department of Labor yesterday adopted a rule delaying the April 10 effective date of its “Fiduciary Rule” for 60 days. The delay gives Labor time to complete the re-study mandated by Trump’s February executive order....more
The IRS released guidance this week announcing that it will not apply IRC § 4975 excise taxes (15% on prohibited transactions) and related reporting requirements “with respect to any transaction or agreement to which the...more
3/29/2017
/ Department of Labor (DOL) ,
Excise Tax ,
Executive Orders ,
Fiduciary Duty ,
Fiduciary Rule ,
Field Assistance Bulletins ,
Internal Revenue Code (IRC) ,
Investment Adviser ,
IRS ,
Reporting Requirements ,
Trump Administration
The Department of Labor’s “fiduciary duty” Rule continues to get more bollixed up. DOL announced a temporary enforcement policy that will give a “free pass” for any violations (a) in the gap between effective date and delay,...more
The two remaining SEC Commissioners agreed March 1 to propose amendments “requiring” municipal securities issuers to disclose non-security financial obligations and material events occurring in other outstanding obligations....more
The US Department of Labor today proposed a 60-day extension (through June 9) for the effective date of its Fiduciary Duty Rule and related exemptions.
The extension would give DOL some time to complete the re-analyses...more
The Department of Labor’s Fiduciary Duty Rule remains on track for April 10 implementation, notwithstanding a maelstrom of hype about it.
Nearly everyone expected the new administration would delay the Rule – and many...more
Effective April 3, 2017, all FINRA arbitration participants (except pro se parties) must use FINRA’s web-based DR-Portal to file and serve documents in both customer and industry arbitrations.
...more
2/8/2017
/ Arbitration ,
Electronic Filing ,
Filing Requirements ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Investment ,
Mediation ,
Portal ,
Pro Se Litigants ,
Securities ,
Securities and Exchange Commission (SEC)
The White House clarified that Trump’s January 30 “two for one” Executive Order doesn’t apply to the SEC and other independent regulatory agencies, Reuters reported.
...more
After markets closed on Friday the 13th, the U.S. Department of Justice (“DOJ”) announced an $864 million settlement regarding Moody’s credit ratings of residential mortgage-backed securities (“RMBS”) and collateralized debt...more
1/19/2017
/ Civil Monetary Penalty ,
Collateralized Debt Obligations ,
Cooperative Compliance Regime ,
Credit Rating Agencies ,
Credit Ratings ,
Department of Justice (DOJ) ,
Financial Crisis ,
Financial Institutions ,
Financial Markets ,
FIRREA ,
Moody's ,
Rating Agencies ,
RMBS ,
Securities ,
Securities Violations ,
Settlement
One of three counts in Volkswagen’s recent $4.3 billion guilty-plea was for obstruction of justice arising from a litigation-hold botched by house counsel.
As VW prepared to admit the defeat-device problems to US...more
1/19/2017
/ Automotive Industry ,
Carbon Emissions ,
Compliance ,
Criminal Prosecution ,
Department of Justice (DOJ) ,
Document Destruction ,
Foreign Corrupt Practices Act (FCPA) ,
Litigation Hold ,
National Emissions Standards ,
Obstruction of Justice ,
Volkswagen ,
White Collar Crimes
On Friday, January 13, the Supreme Court granted certiorari to resolve a Circuit split on the extent to which SEC enforcement actions are restricted by the five-year statute of limitations in 28 U.S.C. § 2462.
Section...more
1/16/2017
/ Civil Monetary Penalty ,
Discovery Rule ,
Disgorgement ,
Enforcement Actions ,
Forfeiture ,
Gabelli v SEC ,
Injunctive Relief ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Statute of Limitations
OCIE released its 2017 exam priorities on January 12. The priorities list was most notable for being shorter than prior years. But that likely means only more focus, rather than less vigor....more
1/13/2017
/ BSA/AML ,
Cybersecurity ,
ETFs ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Investment ,
Investment Adviser ,
Money Market Funds ,
Municipal Advisers ,
OCIE ,
Pensions ,
Private Funds ,
Recidivism ,
Retail Investors ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC)
The Port Authority of New York and New Jersey has admitted wrongdoing and agreed to pay a $400,000 penalty to settle SEC charges that it failed to adequately disclose project risks to investors purchasing $2.3 billion in...more
On January 4, new President and CEO Richard Cook issued FINRA’s Annual Regulatory and Examination Priorities Letter. This year’s list in summary is:
New for 2017:
Targeted electronic off-site reviews “on select...more
1/6/2017
/ Big Data ,
BSA/AML ,
Cybersecurity ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Industry Examinations ,
Liquidity Risk Management Rule ,
Market Manipulation ,
Mutual Funds ,
Regulatory Agenda ,
REIT ,
Risk Management ,
Risk Mitigation ,
Securities ,
Spoofing