Last week, the Supreme Court held that knowing distributors of another’s false statements still could be primarily liable under parts of Rule 10b-5, even though they didn’t “make” the statements under prior precedent....more
4/2/2019
/ Appeals ,
Enforcement Actions ,
False Statements ,
Fines ,
Intent to Defraud ,
Investment Banks ,
Lorenzo v SEC ,
Material Dissemination ,
Misleading Statements ,
Reaffirmation ,
Rule 10b-5 ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Suspensions
This week, the SEC’s Division of Investment Management issued a letter seeking industry and public input on custody issues arising from digital assets....more
Last week, SEC Enforcement staff lost a bid for a preliminary injunction against a prospective ICO in its pre-offering testing phase....more
12/3/2018
/ Blockchain ,
Cryptocurrency ,
Digital Currency ,
Distributed Ledger Technology (DLT) ,
Enforcement Actions ,
Initial Coin Offering (ICOs) ,
Preliminary Injunctions ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Token Sales ,
Unregistered Securities
Last Friday, November 16, the SEC issued a pair of settled actions setting a de facto standard of compliance for unregistered ICOs wanting to “come in from the cold.” In each of them, the ICO offeror paid a $250,000 monetary...more
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
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
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
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
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
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
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
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
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
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)
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 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
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
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