The Tenth Circuit recently held that the SEC’s in-house judges are “inferior officers” hired in violation of Article II’s Appointment Clauses, creating a split with the D.C. Circuit over the issue.
The Tenth Circuit held...more
The Sixth Circuit this week declined the SEC’s request to dismiss a Constitutional challenge to the new MSRB pay-to-play rules. Instead, the Court ordered the case to a merits panel for consideration. The Republican parties...more
The Sixth Circuit this week declined the SEC’s request to dismiss a Constitutional challenge to the new MSRB pay-to-play rules. Instead, the Court ordered the case to a merits panel for consideration. The Republican parties...more
10/10/2016
/ Administrative Merits Determinations ,
Broker-Dealer ,
Financial Institutions ,
Financial Markets ,
Investment Adviser ,
Motion to Dismiss ,
MSRB ,
Municipal Advisers ,
Pay-To-Play ,
Securities ,
Securities and Exchange Commission (SEC)
Having lost her initial suit (and appeal) to enjoin an SEC administrative enforcement action against her, the so-called “diva of distressed,” Lynn Tilton recently filed another lawsuit trying to halt her upcoming October 24...more
The SEC has fined an Atlanta company $265,000 for using various severance agreements restricting whistleblower activities.
The Dodd-Frank Act added ’34 Act § 21F encouraging whistleblower programs. The SEC adopted Rule...more
9/12/2016
/ BlueLinx Holdings ,
Confidential Information ,
Dodd-Frank ,
Employer Liability Issues ,
Government Agencies ,
Government Investigations ,
Hiring & Firing ,
Popular ,
Securities and Exchange Commission (SEC) ,
Severance Agreements ,
Whistleblower Protection Policies ,
Whistleblowers
The SEC announced August 25 that it approved FINRA’s pay-to-play rules governing placement-agent or solicitor broker-dealers and was “prepared” to approve the extension of MSRB Rule G-37 to municipal advisors as well....more
9/8/2016
/ Broker-Dealer ,
Dodd-Frank ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Markets ,
Investment Adviser ,
MSRB ,
Municipal Advisers ,
Pay-To-Play ,
Rule 206(4)-5 ,
Rule G-37 ,
Securities ,
Securities and Exchange Commission (SEC)
On August 24, the SEC announced settled administrative actions against 71 state and local issuers arising from $3.7 trillion in municipal securities offerings. The Commission alleged the issuers made false statements...more
9/6/2016
/ Administrative Proceedings ,
Cease and Desist Orders ,
Disclosure Requirements ,
Enforcement Actions ,
False Statements ,
Financial Markets ,
MCDC ,
Municipal Bonds ,
Municipal Securities Issuers ,
Municipal Securities Market ,
Sanctions ,
Securities and Exchange Commission (SEC)
The SEC announced its second enforcement action in a week against a company using severance or confidentiality agreements requiring employees to waive whistleblower bounties or their right to bring a qui tam action....more
8/18/2016
/ Confidential Information ,
Corporate Counsel ,
Dodd-Frank ,
Enforcement Actions ,
Fines ,
Health Net ,
Qui Tam ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Severance Agreements ,
Whistleblower Awards ,
Whistleblowers
The SEC has fined an Atlanta company $265,000 for using various severance agreements restricting whistleblower activities.
The Dodd-Frank Act added ’34 Act § 21F encouraging whistleblower programs....more
8/15/2016
/ Civil Monetary Penalty ,
Confidential Information ,
Dodd-Frank ,
Employment Contract ,
Rule 21F ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Violations ,
Severance Agreements ,
Unfair Labor Practices ,
Waivers ,
Whistleblower Awards ,
Whistleblower Protection Policies ,
Whistleblowers
The D.C. Circuit has affirmed that SEC ALJs are not constitutional Officers subject to the Appointments Clause, rejecting perhaps the strongest of the constitutional challenges to the Commission’s administrative forum. The...more
This SRO gamesmanship is making a mockery of governing.
The latest is the SEC’s position that it didn’t take any action on the new MSRB Rules extending pay-to-play prohibitions to municipal advisors, so it can’t be sued...more
8/2/2016
/ Bonds ,
Dodd-Frank ,
MSRB ,
Municipal Advisers ,
Municipal Bonds ,
Pay-To-Play ,
Regulatory Oversight ,
Rule G-37 ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
SRO
Last month, the 6th Circuit joined the majority view recognizing the “materialization of the risk” theory of loss-causation as an alternative to “corrective-disclosure” in securities litigation under Rule 10b-5....more
8/1/2016
/ Corrective Actions ,
Disclosure Requirements ,
Financial Markets ,
Loss Causation ,
Material Misrepresentation ,
PSLRA ,
Rule 10b-5 ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Twombly/Iqbal Pleading Standard
The Eleventh Circuit Friday joined three others in concluding that Congress intended Respondents must wait until appeal from the Commission to have a Court consider their challenges to the Constitutionality of the SEC’s...more
For years, self-regulatory agencies (like FINRA or the Exchanges) have wielded the statutory authority granted them by Congress – and backed by the SEC – exercising governmental power to compel testimony, impose fines and...more
The Second Circuit has affirmed dismissal of “diva of distressed” Lynn Tilton’s constitutional challenge to the SEC’s administrative forum, holding that issue isn’t reviewable by the courts until an appeal after two levels of...more
Last week, the 11th Circuit held that the limitations period of 28 U.S.C. § 2462 bars disgorgement or declarative relief for acts having occurred five years before the SEC files an action.
The Court drew a distinction...more
In a recent new release, the Tennessee Securities Division urged investors to ask tough questions of their investment advisors, and about their compensation, account arrangements and educational / regulatory history. The May...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
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
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
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