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 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
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
On December 16, FINRA submitted for SEC approval proposed Rule 2273 to require that brokers send customers an “educational disclosure” when changing firms. Although the proposal deletes a controversial provision that would...more
On December 16, the Municipal Securities Rulemaking Board (“MSRB”) filed with the SEC a proposed rule that would extend to municipal advisers the MSRB’s existing rule prohibiting “pay-to-play” practices and restricting...more
Last week FINRA proposed for SEC adoption a “pay-to-play” rule for broker-dealers engaged in distribution or solicitation activities with government entities. The Proposed Rule is modeled after investment-adviser pay-to-play...more
The SEC granted two petitions for review last week that tee-up significant issues for full Commission consideration late next Spring. The Commission will consider the application of the Second Circuit’s Newman decision...more
Five years after the SEC brought charges that cost two fund executives their jobs, the U.S. First Circuit overturned the sanctions, chiding the SEC for misreading critical evidence, lacking substantial evidence for its...more
There’s a developing circuit split over whistleblower standing for retaliation claims. A decision this week extended that split to U.S. district courts within Tennessee, too. In Verble v. Morgan Stanley Smith Barney, LLC, No....more
Atlanta federal Judge Leigh Martin May enjoined the SEC from proceeding in yet another administrative enforcement action Tuesday. Ironridge Global IV, Ltd. v. SEC, No. 1:15-CV-2512 (USDC NDGA Nov. 17, 2015)....more
Last Thursday, November 12, the MSRB published its Compliance Advisory for Municipal Advisors (“MA’s”). The new MA regulatory regime was imposed by Dodd-Frank and implemented by the MSRB and SEC over the past several years....more
SEC Commissioners Piwowar and Gallagher dissented from a recent Commission Opinion sanctioning an investment adviser’s use of misleading historical data purporting to validate an asset-allocation model. Agreeing there was a...more
Laurie Bebo, CEO of Assisted Living Concepts, initially got some sympathetic words from the U.S. District Judge who felt constrained to turn away her constitutional challenge to the SEC’s administrative forum:
The Court...more
10/12/2015
/ Administrative Law Judge (ALJ) ,
Administrative Proceedings ,
Appointments Clause ,
Bebo v SEC ,
Disclosure ,
Due Process ,
Enforcement Actions ,
Equal Protection ,
Fraud ,
Publicly-Traded Companies ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Seventh Amendment
The battle over the constitutionality of the SEC’s administrative forum now moves to the U.S. Eleventh Circuit. The appellate court issued an order Wednesday, denying the SEC’s bid to upset the trial court’s preliminary...more
The citadel of the SEC’s administrative forum has been under assault from several vectors over the past year or so, as a chorus of dissenting Respondents have mounted increasing challenges to its constitutional legitimacy, as...more
10/5/2015
/ Administrative Law Judge (ALJ) ,
Administrative Proceedings ,
Article II ,
Bebo v SEC ,
Chamber of Commerce ,
Criminal Investigations ,
Due Process ,
Enforcement Actions ,
Fifth Amendment ,
Insider Trading ,
Non-Delegation Doctrine ,
Rules of Practice ,
Securities and Exchange Commission (SEC) ,
Transparency ,
White Collar Crimes
The SEC recently – and predictably – rejected a Respondents’ arguments challenging the constitutionality of the agency’s administrative forum. The September 17 Timbervest decision was the first of the constitutional...more
On September 30, the SEC issued its second round of mass settled actions over municipal securities disclosure issues, as part of its Municipal Continuing Disclosure Cooperation (“MCDC”) Initiative. In this round, 22 municipal...more
The SEC has announced a series of proposed changes to the Rules of Practice governing its internal enforcement actions. The changes update the decade-old Rules and respond in small part to a groundswell of criticism about the...more
Tennessee has joined other states in formally approving lawyers’ cloud-storage of client-confidential data. The Board of Professional Responsibility (“BOPR”) held that lawyers ethically may use cloud storage for...more
9/25/2015
/ American Bar Association (ABA) ,
Banking Sector ,
Banks ,
Breach Notification Rule ,
Bring Your Own Device (BYOD) ,
Client Data ,
Client Services ,
Cloud Computing ,
Compliance ,
Confidential Information ,
Confidentiality Policies ,
Corporate Governance ,
Cybersecurity ,
Data Breach ,
Data Loss Prevention ,
Data Security ,
Due Diligence ,
Ethics ,
Financial Institutions ,
Incident Response Plans ,
Law Practice Management ,
OCIE ,
Personally Identifiable Information ,
Popular ,
Risk Assessment ,
Securities and Exchange Commission (SEC) ,
Third-Party Service Provider
A week after OCIE announced it would conduct a second round of cyber-security exams, the Commission emphasized the issue by bringing an enforcement action against a non-custodial investment-adviser over a remediated data...more
9/25/2015
/ Breach Notification Rule ,
Cyber Attacks ,
Cyber Crimes ,
Cybersecurity ,
Data Breach ,
Data Protection ,
Data Security ,
Enforcement Actions ,
Financial Institutions ,
Free Identity Theft Protection ,
Hackers ,
Investment Adviser ,
OCIE ,
Personally Identifiable Information ,
Popular ,
Securities and Exchange Commission (SEC) ,
SIFMA
Two rulings last week ordered the SEC to stop administrative proceedings in two cases, pending the Second Circuit’s ruling on the constitutionality of its administrative forum. The Second Circuit stayed the SEC’s prosecution...more
This week the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced a second-round of cybersecurity examinations, continuing its initiatives on the issue. The move follows the SEC’s: March 2014 roundtable...more
9/17/2015
/ Bring Your Own Device (BYOD) ,
Compliance ,
Corporate Governance ,
Cyber Attacks ,
Cybersecurity ,
Data Security ,
Due Diligence ,
Financial Institutions ,
Financial Markets ,
Incident Response Plans ,
Loss Prevention ,
OCIE ,
Risk Assessment ,
Securities and Exchange Commission (SEC) ,
SIFMA ,
Third-Party Service Provider
An SEC administrative law judge (“ALJ”) found that former Wells Fargo trader Joseph Ruggieri traded on material nonpublic information tipped him by former analyst Greg Bolan, but dismissed the insider-trading charges against...more
9/16/2015
/ Administrative Law Judge (ALJ) ,
Appointments Clause ,
Banking Sector ,
Banks ,
Due Process ,
Enforcement Actions ,
Fiduciary Duty ,
Financial Institutions ,
Financial Markets ,
Insider Trading ,
Material Nonpublic Information ,
Personal Benefit ,
Publicly-Traded Companies ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Seventh Amendment ,
Tippees ,
Wells Fargo
The Municipal Securities Rulemaking Board (“MSRB”) announced September 2 that it has submitted for SEC approval proposed amendments extending its gift-limitations Rule G-20 to municipal advisors.
In general, the Rule...more
The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) issued a recent “Risk Alert” noting observed deficiencies in broker-dealer supervision and compliance controls over retail sales of structured products –...more
9/4/2015
/ Broker-Dealer ,
Brokers ,
Compliance ,
Due Diligence ,
Elder Issues ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Fixed Income Investments ,
Investment ,
Investors ,
OCIE ,
Risk Alert ,
Securities and Exchange Commission (SEC) ,
Structured Financial Products