It’s hornbook law that a later intentional breach of contract, alone, doesn’t equal promissory fraud. Holding it therefore cannot establish mail or wire fraud, the Second Circuit reversed the Government’s $1.2 Billion FIRREA...more
5/26/2016
/ Banking Sector ,
Breach of Contract ,
Countrywide ,
False Claims Act (FCA) ,
Fannie Mae ,
Financial Institutions ,
FIRREA ,
Freddie Mac ,
GSE ,
Mail Fraud ,
Mortgage Fraud ,
Mortgages ,
Wire Fraud
The U.S. Department of Labor recently announced a new suite of Rules that are a game-changer for any Financial Institution that gives investment advice (including rollovers and distributions) to owners or beneficiaries of...more
Starting June 23, municipal advisors will be subject to revised Rule 42 and its heightened engagement letter and disclosure obligations. SIFMA has released exposure drafts of compliance documents to help MAs meet those...more
Affirming dismissal of some lingering Morgan Keegan bond fund actions, the Sixth Circuit joined the Second in holding that American Pipe class-action tolling does not affect the expiration of a statute of repose. The Court...more
In AML/BSA rule amendments published May 11, FinCEN will require “covered financial institutions” to implement new beneficial-owner identification and verification as part of their Customer Due Diligence (“CDD”) and adopt...more
The Supreme Court held May 16 that the exclusive federal jurisdiction provision of the 1934 Securities Exchange Act means the same as the “arising under” test for federal-question jurisdiction and does not pre-empt state law...more
5/18/2016
/ 28 USC 1331 ,
Exclusive Jurisdiction ,
Federal Jurisdiction ,
Financial Institutions ,
Merrill Lynch ,
Merrill Lynch v Manning ,
Regulation SHO ,
SCOTUS ,
Securities Exchange Act ,
Securities Litigation ,
Short Selling
The MSRB’s amended Rule G-42 becomes effective June 23, prescribing new conduct standards for municipal advisors and for the underwriters working with them. In advance of the effective date, the MSRB has published...more
Richard Ketchum, the retiring CEO of FINRA, said that the regulator intends to expand the reporting available through its BrokerCheck® web tool to include relative concentrations of disciplined brokers in industry firms....more
The Securities Division of the Tennessee Department of Commerce and Insurance issued a May 2 press release encouraging consumers to report financial-services misconduct to its Financial Services Investigations Unit....more
Tennessee fraudulent misrepresentation claims – and “investment contract” claims under the State’s Blue Sky Law – fail the “reasonable reliance” requirement, where the plaintiff himself asserts it’s a fraud because nobody...more
The Municipal Securities Rulemaking Board (“MSRB”) issued a concept release last month suggesting that market transparency trumps the direct Congressional prohibition against federal regulations requiring filing of...more
An article in this weekend’s Wall Street Journal called for FINRA to make the database underlying its BrokerCheck® system (of reports on stockbroker registration and disciplinary history) more widely available for data mining...more
The SEC recently affirmed its ALJ’s ruling barring Alan Stanford’s former CCO from the industry and ordering monetary penalties of $260,000 together with $591,992 in disgorgement. The Commission held the CCO approved false...more
On April 12, the Tennessee Republican Party filed a petition in the US Sixth Circuit Court of Appeals, seeking to invalidate the SEC’s approval of new rules extending the MSRB’s long-standing “pay-to-play” prohibitions to new...more
The Fifth Circuit Bar Association’s summary reports:
“Appellants were investors who suffered financial losses as a result of R. Allen Stanford’s Ponzi scheme. In their arbitration complaint, they sought $80 million in...more
The Tennessee Court of Appeals recently held that a trustee’s signature of brokerage account agreement containing a pre-dispute arbitration clause did not bind the trust’s minor beneficiary.
The Court held that an “all...more
In a January 21, 2016 Report of Investigation, the Inspector General for the Securities Exchange Commission found no evidence to substantiate allegations of pro-agency bias among SEC administrative law judges. The allegations...more
The MSRB’s Rule G-37 amendments applying pay-to-play prohibitions to Municipal Advisors and their third-party solicitors will become effective August 17, 2016....more
White House officials this week said that President Obama’s fiscal 2017 budget will seek major increases in funding for Wall Street regulators in the near term, and proposes to double their funding by 2021....more
The U.S. Department of Justice (“DOJ”) has a new view in cases involving corporate wrongdoing (includingfraud and abuse, qui tam, and similar matters). And its gaze is focused squarely on rooting out and punishing the...more
FINRA reported that, for 2015, Claimants won about half of private securities arbitrations: 47% for all-public panel decisions; 45% for majority-public panels. A colleague and securities mediator, Dana Pescosolido, recently...more
The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced the agency’s priorities for this year on January 11. Commission staff will focus on three broad areas: Retail Investors, Market-Wide Risks, and...more
FINRA released its annual Regulatory and Examination Priorities Letter (so-called “Errico Letter”) on January 5. FINRA’s top five priorities: Among the also-rans, industry participants will recognize many perennial favorites,...more
As 2015 ended, FINRA fined Barclays Capital $13.75 million for mutual-fund switching and breakpoint supervisory failures that might have been avoided if that part of Barclay’s WSPs had been properly calibrated and/or part of...more
On Christmas Eve’s eve, the SEC approved, without change, the MSRB’s proposed conduct rule for municipal advisors. Broadly, the Rule imposes:
New Rule G-42 has been in the works since January, 2014 and the MSRB filed two...more