Bridging the Week - December 2018

by Katten Muchin Rosenman LLP
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A federal judge said that it is not a violation of federal law for a trading firm and its chief executive officer to be smarter than their counterparties in ruling against the Commodity Futures Trading Commission in an enforcement action alleging manipulation and attempted manipulation. Separately, the National Futures Association proposed amendments to its guidance to members regarding the contents of their information systems security programs. As a result, the following matters are covered in this week’s edition of Bridging the Week:

  • Being Smarter Than Your Counterparties Is Not Manipulation Rules Judge in CFTC Enforcement Action (includes Legal Weeds);
  • NFA Proposes Guidance Amendments to Enhance Cybersecurity (includes Compliance Weeds); and more.

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Being Smarter Than Your Counterparties Is Not Manipulation Rules Judge in CFTC Enforcement Action

A US federal court in New York City ruled that the Commodity Futures Trading Commission did not meet its burden of proof in its enforcement action against DRW Investments, LLC and Don Wilson, its chief executive officer. The CFTC had charged the defendants with manipulation and attempted manipulation of the IDEX USD Three-Month Interest Rate Swap Futures Contract from January 24 through August 12, 2011. 

The court held that the defendants’ trading activities were legitimate and were consistent with their view that the futures contract’s design was flawed and that the futures instrument was inherently more valuable than a comparable over-the-counter contract. According to the court, “[i]t is not illegal to be smarter than your counterparties in a swap transaction, nor is it improper to understand a financial product better than the people who invented that product.”

The CFTC initially filed charges against the defendants in 2013. 

According to the Commission, DRW established a long position in the Three-Month Contract beginning in August 2010. Afterwards, alleged the CFTC, beginning in December 2010, the defendants placed bids “that DRW knew would never be accepted” to artificially influence the settlement prices in their favor during the 15-minute period that most influenced settlement prices on at least 118 trading days, in a “banging the close”–type scheme. 

A four-day bench trial before the Hon. Richard Sullivan ensued in December 2016. Afterwards, attorneys for the Commission argued during their closing argument that it was the intent of defendants to produce a “price distortion” through placement of “illegitimate bids during the closing period day after day for seven straight months” that favored defendants’ existing positions by prompting favorable settlement prices. Among other things, said the Commission, defendants’ bids were illegitimate because they knew there was no market interest on the other side.

The court, in a decision by the Hon. Mr. Sullivan – now a judge on the Circuit Court of Appeals for the Second Circuit – rejected the CFTC’s arguments that the defendants’ conduct constituted manipulation or attempted manipulation. 

The court said defendants determined that, at the time, a long position in the Three-Month Contract was more valuable than a corresponding long position in an OTC swap contract because the futures instrument did not appropriately account and adjust for long position holders receiving variation margin payments when interest rates were rising, while short position holders received variation margin payments when interest rates were declining. Long position holders of Three-Month Contracts thus received their variation margin payments at a better time to invest. This s0-called "convexity effect" did not typically exist in corresponding OTC swaps in 2011 as no variation margin passed between counterparties, observed the court. As a result, long positions holders of Three-Month Contracts had a more advantageous holding than holders of a corresponding OTC swap instrument.

In response, said the court, each day, the defendants would place bids during the closing periods below and up to their calculation of fair value. The court acknowledged these bids helped increase the value of defendants’ open positions in the Three-Month Contract by impacting settlement prices. However, the court found that defendants’ trading was consistent with their quantitative analysis, and they were always interested to attract counterparties and obtain executions. According to the court, the defendants “made bids with an honest desire to transact at those prices, and … they fully believed the resulting settlement prices to be reflective of the forces of supply and demand.” 

In order to prove manipulation, said the court, the CFTC had to show that defendants had the ability to influence market price, an artificial price existed, defendants caused the non-bona fide price, and defendants intended to cause the non-legitimate price. To show attempted manipulation, explained the court, the Commission did not have to show an artificial price existed, but had to show that defendants intended to cause an artificial price. However, the court ruled that it was not manipulation or attempted manipulation for defendants to take advantage of flawed exchange rules that were public information where their bids reflected their bona fide perception of fair value and were designed to induce liquidity. The IDCH settlement prices were not artificial, ruled the court, and defendants did not intend to cause an illegitimate settlement price through their actions.

The court noted that, during trial, the CFTC “unrelentingly” also described defendants’ conduct as “banging the close.” While acknowledging that courts have not precisely defined this term, the court said that defendants’ trading activities were not captured by its common meaning as agreed by the parties. “[A] slogan is a poor substitute for evidence, particularly where the slogan doesn’t fit the facts of the case,” said the court.

The Three-Month Contract was offered on the NASDAQ OMX Futures Exchange (NFX) during the relevant time and was cleared through the International Derivatives Clearing House. The Three-Month Contract was delisted by NFX on December 16, 2011, for failing to attract liquidity.

In response to the Court's verdict, DRW and Mr. Wilson issued the following statement:

We are gratified by the Court’s decision, which confirms our long-held position that our trading activity was lawful, legitimate and in line with market regulation. Importantly, the Court affirmed that artificiality is required for market manipulation to have occurred. Today’s decision upholds the principles of price discovery, transparency and integrity in the markets.

(Click here for a greater discussion of the closing arguments in the defendants’ trial and additional background on the CFTC enforcement action in the article “Judge Questions CFTC’s Theory of Markets in DRW Alleged Manipulation Case During Closing Arguments” in the December 11, 2016 edition of Bridging the Week.)

Legal Weeds: The court’s decision in the CFTC’s enforcement action against defendants was decisive although its precedent value may be limited because of the unique facts of the case. 

Here defendants took advantage of a design flaw in an exchange futures contract and settlement rules to benefit their existing position in the relevant Three-Month Contract. The court held this was not manipulation or attempted manipulation because the CFTC failed to meet its burden of proof that the defendants specifically intended to cause an artificial price, let alone caused an artificial price. Indeed, said the court, defendants’ bids were consistently lower than its objectively supported view of the contract’s true value. According to the court, “DRW’s bidding practices actually contributed to price discovery rather than price manipulation.” 

Moreover, if defendants’ bids were above market value as alleged by the Commission, market participants would have “surely” accepted such bids knowing they could profit when prices returned to their natural levels. The court criticized the Commission for making a “tautological’ argument that prices were artificial solely because defendants attempted to “affect prices.” However, said the court, this position, if “taken to its logical conclusion would effectively bar market participants with open positions from ever making additional bids to pursue future transactions.” 

In its complaint against defendants, the CFTC solely relied on the traditional provisions in relevant law prohibiting manipulation and attempted manipulation because the challenged conduct occurred prior to the effective date of a new provision of law prohibiting fraud-based manipulation under the Dodd-Frank Wall Street Reform and Consumer Protection Act. (Click here to access 7 U.S.C. § 9(3) (prior to D0dd-Frank, effectively 7 U.S.C. § 9) and here for 7. U.S.C. § 13(a)(2) – the CFTC’s traditional anti-manipulation authorities. Click here to access 7 U.S.C. § 9(1) – the CFTC’s new Dodd-Frank authority.)

Under this new provision, it is now prohibited for any person to engage in “any manipulative or deceptive device or contrivance” in connection with any swap, or a contract of sale of any commodity in interstate commerce or any futures contract in violation of any rule the CFTC might adopt. The CFTC has, in fact, adopted a specific rule related to this statutory provision, and has used the law and rule to prosecute a wide swath of conduct – from its first use by the CFTC in a 2013 enforcement action against JP Morgan in connection with its “London Whale” episode to subsequent enforcement actions involving illegal off-exchange metals transactions; claims of more traditional manipulation of wheat; allegations of spoofing; and charges of insider trading. (Click here to access CFTC Rule 180.1; click here for background on the CFTC's use of its Dodd-Frank authority in the article, "Ex-Airline Employee Sued by CFTC for Insider Trading of Futures Based on Misappropriated Information" in the October 2, 2016 edition of Bridging the Week.) The CFTC claims it now has broad authority to prosecute persons for their intentional or reckless employment or use of any manipulative device, scheme or artifice to defraud. (Click here for background on the CFTC's new authority in the Federal Register Release adopting CFTC Rule 180.1. Click here, however, to access a discussion regarding a challenge to the CFTC’s position regarding its new authority in the article “California Federal Court Dismissal of CFTC Monex Enforcement Action Upsets Stable Legal Theories” in the May 6, 2018 edition of Bridging the Week. The Monex decision is currently on appeal. )

However, even if it was able to apply its new authority, the CFTC most likely would have lost an enforcement action against defendants premised on the facts of this case. Although under its Dodd-Frank fraud-based anti-manipulation authority the CFTC does not have to prove that a price or market effect existed to prevail in a manipulation claim, it still has to evidence an intent to create false prices or at least some type of recklessness which led or could have led to non-bona fide results. Here, however, the Court found that defendants solely intended to achieve legitimate prices. They placed bids relying on the public terms of the flawed Three-Month Contract that reflected their view of the contract’s true value. They did so with an intent to attract liquidity and effectuate execution and not to mislead others. Settlement prices that came about because of their activities reflected fully legitimate, not illegitimate, market activity, said the court.

In the court’s view, the CFTC simply did not present sufficient evidence to support its charges against defendants and “persisted in its cry of market manipulation based on little more than an ‘earth is flat’ style conviction that such manipulation must have happened because the market remained illiquid.” That strategy was not enough to sustain the CFTC’s case under its traditional manipulation authority and, in my view, would most likely not have been sufficient under its new, broader authority.

Briefly:

  • NFA Proposes Guidance Amendments to Enhance Cybersecurity: The National Futures Association proposed amendments to its 2016 guidance that requires all members to implement a written information systems security program to address unauthorized access or attacks on their information technology systems and how they will respond in such situations. NFA does not mandate the form of any member’s ISSP but provides discretion to design an ISSP “appropriate for the member.” (Click here to access the relevant NFA interpretive notice.) 

NFA’s proposed amendments will require that members provide training to their employees regarding its ISSP upon hiring, at least annually, and more frequently “if circumstances warrant.” Members will be required to identify the topics of training in their ISSPs’ description of their ongoing education and training related to information security.

Additionally, NFA’s proposed changes will expressly require members to notify NFA if they experience any cybersecurity incidents, and mandate approval of an ISSP by a member’s chief executive officer, other senior level officer with primary oversight for information system security (e.g., chief information security officer or chief technology officer), or other senior official who is a principal of the member and “has authority to supervise the [m]ember’s execution of its ISSP.”

In its proposed revised guidance, NFA indicated it will publish information on cybersecurity best practices and standard setting organizations that may be consulted for cybersecurity information in NFA’s ISSP Frequently Asked Questions that will be updated from time to time. (Click here to access NFA’s current FAQs.) Such information is currently available in NFA’s cybersecurity guidance itself.

Absent objection by the Commodity Futures Trading Commission, NFA’s proposed amendments should be effective before year-end.

Unrelatedly, the CFTC proposed to amend its requirements that most registrants provide annual privacy notices to customers under all circumstances. The CFTC proposed that an annual notice not be required provided nonpublic personal information is provided to nonaffiliated persons only under certain enumerated circumstances and the firm has not changed its personal information policies and practices since its last notice. If a firm subsequently changes its policies and practices, it would have to provide a written notice to customers as prescribed by the Commission. The CFTC will accept comments on its proposal for 60 days following its publication in the Federal Register.

Compliance Weeds: CFTC registrants and NFA members have express obligations to ensure the security of their information systems and customers’ personal information. Among other things, most CFTC registrants are required to maintain policies and procedures to protect customer records and information (click hereto access CFTC Rule 160.30) and a written identity theft program (click here to access CFTC Rule 162.30(d)), while all NFA members must maintain a written information systems security program. SEC registrants have similar obligations. (Click here for background in the Compliance Weeds associated with the article “Broker-Dealer Resolves SEC Charges That Inadequate Cybersecurity Procedures Led to Cyber Intrusion, Compromising Customer Personal Information” in the September 30, 2018 edition of Bridging the Week.)

However, it appears regulators are increasingly not hesitant to file an enforcement action under a general failure to supervise theory when there is a cybersecurity breach if they feel that adequate policies and procedures reasonably designed to prevent and/or respond to a breach did not exist, and/or customer information or funds were or may have been compromised.

Within the last 15 months, the CFTC resolved an enforcement against Tillage Commodities, LLC, a CFTC-registered commodity pool operator, with failure to supervise for purportedly not monitoring and detecting unauthorized wire transfers processed by the administrator of a fund it operated. (Click here for details in the article “Two Commodity Pool Operators Charged by CFTC with Failure to Supervise” in the October 1, 2017 edition of Bridging the Week.) The CFTC also settled an enforcement action against AMP Global Clearing LLC, a CFTC-registered futures commission merchant, for its alleged failure to supervise a third party’s implementation of “critical” provisions of its information system security program. (Click here for details in the article “CFTC Says Futures Brokerage Firm’s Failure to Supervise Led to Unauthorized Cyber Attack” in the February 18, 2018 edition of Between Bridges.)

The beginning of each new year is as good an opportunity as any for financial services firms to review their ISSPs, other programs to protect customer confidential personal information, and relevant training.

More Briefly:

  • CFTC Chairman Cautions UK and EU to Lay Groundwork Now for No Clearinghouse Disruptions If Potential Hard Brexit: J. Christopher Giancarlo, Chairman of the Commodity Futures Trading Commission, expressed concerns regarding the impact of the UK’s withdrawal from the European Union on UK and EU27 derivatives markets. He urged EU authorities to clarify when a proposed equivalence decision for the UK and recognition determination for UK clearinghouses will be made, as well as the scope of such decisions, in light of the potential of a “no-deal Brexit.” Securities and Exchange Commission Chairman Jay Clayton similarly urged the articulation by the UK and EU27 of a “path forward” to minimize adverse impacts on investors and securities markets arising from Brexit. He urged member states to look beyond “immediate local economic and other opportunities” to focus on long-term economic performance and stability but lamented “I do not yet see wide acceptance of this principle.”
  • Trading Firm Sanctioned by IFUS for Not Adequately Testing Semi-Automated Trading System Before Rollout: UNCIA Energy LP – Series I agreed to pay a fine of US $37,500 to resolve disciplinary actions brought by ICE Futures U.S. The exchange claimed that on “several occasions” between April and August 2017, the firm’s semi-automated trading system entered orders at prices significantly away from the prevailing bid and/or offer without the intent to execute bona fide trades. IFUS said that, under the duty of supervision, UNCIA had an obligation to test its ATS prior to deployment; however, the firm may not have done so adequately. In agreeing to the sanction, UNCIA neither admitted nor denied the rule violation.

Unrelatedly, the Chicago Mercantile Exchange resolved a disciplinary action against Hana Financial Investment for not cooperating with an exchange investigation into the trading activities of its customers. The firm agreed to pay a penalty of US $425,000 to settle this matter. Previously, Hana was subject to a summary access denial order by the exchange as a result of its noncooperation as well as its apparent netting of customer positions among independently owned and controlled accounts within omnibus accounts at “several” CME Group clearing members.(Click here for details in the article “CME Group Summarily Suspends Foreign Broker’s Access to All Its Markets for Not Cooperating Fully With Its Investigations and Purported Position Misreporting” in the June 3, 2018 edition of Bridging the Week.)

Separately, JoErik Financial Pte Ltd agreed to pay a fine of US $30,000 and disgorge profits in excess of US $20,000, while Jimmy Ng Kian Bin consented to a sanction of US $30,000 and a three-month all CME Group exchanges access suspension to settle spoofing allegations on the CME. Brian Soldano acceded to remit a fine of US $15,000 and a nine-week IFUS access suspension to settle spoofing charges on IFUS. Three persons – Xiaobao Huang, Mihir Salla and Ge Shuai – were ordered to pay fines from US $45,000 to US $60,000 and permanently barred from trading access to all CME Group exchanges for engaging in disruptive trading practices on the New York Mercantile Exchange and/or Commodity Exchange, Inc. while using another person’s Tag 50 identification. Apparently none of the individuals participated in the exchanges’ disciplinary process.

  • Congressmen Propose Laws Mandating CFTC Study How to Prevent Virtual Currency Manipulation and Promote US Competitiveness in Blockchain Technology: Two Congressmen – Hon. Ted Budd and Hon. Darren Soto – proposed legislation requiring the Commodity Futures Trading Commission to recommend legislative changes that would be necessary for it and other federal agencies to enhance their surveillance and prevention of price manipulation of cryptocurrencies and protect investors from associated harm. A separate proposed bill would require the CFTC to recommend legislative changes to promote the competitiveness of the US in blockchain and cryptocurrency technologies and to provide a new optional regulatory regime for virtual currency spot markets that, among other things, would preempt state regulation. The CFTC is required to consult with the Securities and Exchange Commission and other relevant federal agencies in making its recommendations under both bills. 

In other legal developments involving cryptoassets:

  • SEC Kicks Bitcoin Fund Consideration Down the Road: The SEC deferred consideration of a Cboe BZX Exchange proposed rule change to enable trading of shares of SolidX bitcoin shares issued by VanEck SolidX Bitcoin Trust. The SEC indicated it will now make a decision regarding the proposed rule change by February 27, 2019. As proposed, each share in the trust would represent a fractional interest in bitcoin holdings by the trust. The SEC instituted formal proceedings to consider the rule change on September 20.
  • Lawsuit Filed Over Recent Bitcoin Cash Hard Fork: United American Corp. sued a number of defendants claiming they manipulated the Bitcoin Cash market by causing adoption of a particular hard fork in the virtual currency on November 15, 2018, causing them a loss of over US $4 million. The plaintiff claimed that the defendants conspired to effectuate the hard fork by, among things, redirecting computer mining capacity to Bitcoin Cash that had been dedicated to other cryptocurrencies in order to increase the probability that the hard fork – known as Bitcoin ABC 0.18.4 – would be adopted. This constituted a temporary centralization of the Bitcoin Cash blockchain controlled by a few participants, contrary to the decentralized model envisioned by bitcoin founder Satoshi Nakamoto, charged the plaintiff. The litigation, which claimed antitrust law violations, was filed in a federal court in Florida. The defendants include Bitmain, Inc., Roger Ver, Payward Ventures, Inc. (d/b/a Kraken) and other persons.
  • NYDFS Authorizes NY Commercial Bank for Blockchain Payment Application: The New York Department of Financial Services approved Signature Bank, a NY-chartered commercial bank, to launch a new digital payment platform that leverages blockchain technology – entitled “Signet” – to allow commercial clients to transfer “Signets” to make payments with no transaction fees on all days at all times. Use of the platform and payments is limited to Signature Bank clients and does involve intermediation.
  • Exempt CTAs and CPOs Reminded of Annual Affirmation Obligation by NFA: The National Futures Association reminded persons operating pursuant to an exemption from commodity pool operator or commodity trading advisor registration to formally affirm their exemption by notice to NFA by March 1, 2019. Failure to affirm an exemption will cause the exemption to be withdrawn on March 4.
  • FinCEN and Five Federal Banking Regulators Encourage BSA/AML Innovative Approaches: The Financial Crimes Enforcement Network of the US Department of Treasury and five banking regulators encouraged banks to evaluate and implement, where appropriate, “innovative approaches,” including the use of artificial intelligence and digital identity technologies, to meet their Bank Secrecy Act and anti-money laundering obligations. The regulators noted that pilot programs adopted by banks “should” not subject them to supervisory criticism even if the programs prove unsuccessful, and pilot programs that expose gaps in existing BSA/AML programs “will not necessarily” subject banks to supervisory action. The regulators cautioned banks to continue to meet their BSA/AML obligations while they experiment through pilot programs involving new technologies.

My View: FinCEN’s and the federal banking regulators’ hedging regarding the potential exposure of banks when exploring new technologies to comply with their BSA/AML obligations materially undercuts their encouragement to experiment with such new technologies.

For further information

Being Smarter Than Your Counterparties Is Not Manipulation Rules Judge in CFTC Enforcement Action:
/ckfinder/userfiles/files/CFTC%20v_%20DRW%20Decision.pdf

CFTC Chairman Cautions UK and EU to Lay Groundwork Now for No Clearinghouse Disruptions If Potential Hard Brexit:
https://www.cftc.gov/PressRoom/SpeechesTestimony/giancarlostatement120618

Congressmen Propose Laws Mandating CFTC Study How to Prevent Virtual Currency Manipulation and Promote US Competitiveness in Blockchain Technology:
https://soto.house.gov/sites/soto.house.gov/files/documents/SOTO_133_xml.pdf
https://soto.house.gov/sites/soto.house.gov/files/documents/SOTO_162_xml.pdf

Exempt CTAs and CPOs Reminded of Annual Affirmation Obligation by NFA:
https://www.nfa.futures.org/news/newsNotice.asp?ArticleID=5072

FinCEN and Five Federal Banking Regulators Encourage BSA/AML Innovative Approaches:
https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20181203a1.pdf

Lawsuit Filed Over Recent Bitcoin Cash Hard Fork:
https://www.morrisoncohen.com/siteFiles/files/2018_12_06%20-%20United%20American%20v_%20Bitmain.pdf

NFA Proposes Guidance Amendments to Enhance Cybersecurity:
https://www.nfa.futures.org/news/PDF/CFTC/Interp-Notc-NFA-CR-2-9-2-36-and-2-49-Information-Systems-Security-Programs.pdf

NYDFS Authorizes NY Commercial Bank for Blockchain Payment Application:
https://www.dfs.ny.gov/about/press/pr1812041.htm

Trading Firm Sanctioned by IFUS for Not Adequately Testing Semi-Automated Trading System Before Rollout:

  • IFUS:

Brian Soldano:
https//www.theice.com/publicdocs/futures_us/disciplinary_notices/ICE_Futures_US_Brian_Soldano_20181205.pdf
UNCIA Energy LP – Series I:
https//www.theice.com/publicdocs/futures_us/disciplinary_notices/ICE_Futures_Uncia_Energy_LP_Series_I_201801204.pdf

  • CME Group:

Jimmy Ng Kian Bin:
https://www.cmegroup.com/notices/disciplinary/2018/12/cme-17-0640-bc-2-jimmy-ng-kian-bin.html#pageNumber=1
Hana Financial Investment:
https://go.cmegroup.com/e/502091/l-investment-html-pageNumber-1/b47kp2/234294651
Xiaobao Huang:
https://www.cmegroup.com/notices/disciplinary/2018/12/COMEX-16-0605-BC-XIAOBAO-HUANG.html#pageNumber=1
https://www.cmegroup.com/notices/disciplinary/2018/12/NYMEX-16-0605-BC-XIAOBAO-HUANG.html#pageNumber=
JoErik Financial Pte. Ltd.:
https://go.cmegroup.com/e/502091/cial-pte-ltd-html-pageNumber-1/b47kp4/234294651
Mihir Salla:
https://www.cmegroup.com/notices/disciplinary/2018/12/COMEX-15-0265-BC-MIHIR-SALLA.html#pageNumber=1
Ge Shuai:
https//www.cmegroup.com/notices/disciplinary/2018/12/COMEX-17-0705-BC-GE-SHUAI.html#pageNumber=1

SEC Kicks Bitcoin Fund Consideration Down the Road:
https://www.sec.gov/rules/sro/cboebzx/2018/34-84731.pdf

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.