Bridging the Week - February 2019

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Both the Securities and Exchange Commission and the Commodity Futures Trading Commission resumed full operations last week. Promptly, the CFTC and the Chicago Board of Trade resolved coordinated enforcement actions against an alleged spoofer of soybean futures products traded on CBOT. Separately, the SEC filed a supplemental brief with a US federal court in California to augment its effort to set aside a November 2018 decision denying the agency a preliminary injunction against defendants in connection with their presales of an initial coin offering and an ICO of a cryptoasset that the SEC alleged was an unregistered security. The SEC claimed that the court misapplied applicable law related to what constitutes a security as well as the standards for a preliminary injunction. As a result, the following matters are covered in this week’s edition of Bridging the Week:

  • CFTC and CBOT Resolve Coordinated Enforcement Actions Against Alleged Soybean Spoofer (includes Compliance Weeds); 
  • Different Roads to Travel for Swap Execution Reform Proposed by CFTC Chairman and New Commissioner (includes My View);
  • Follow-up: SEC Again Requests California Federal Court to Reconsider Denial of Preliminary Injunction Against Seller of Purported Unregistered Security in ICO (includes Legal Weeds); and more.

The next regular edition of Bridging the Week will be distributed on February 19, 2019, because of business travel and the US Presidents’ Day holiday on February 18.

Please click here for the Video Version.

Article Version

Briefly:

  • CFTC and CBOT Resolve Coordinated Enforcement Actions Against Alleged Soybean Spoofer: Kevin Crepeau, a member of the Chicago Board of Trade, agreed to resolve an enforcement action brought by the Commodity Futures Trading Commission, claiming that, from approximately August 2013 through at least June 2016, he placed numerous spoofing orders in violation of applicable law in the CBOT soybean, soybean meal and soybean oil futures markets. Mr. Crepeau contemporaneously settled a disciplinary action filed by the CBOT related to the same allegations.

According to both the CFTC and CBOT, during the relevant time, Mr. Crepeau placed smaller bids and offers on one side of a market using automated spread placement functionality while manually entering larger orders on the opposite side of the market that he purportedly did not intend to execute. The CFTC and CBOT alleged that Mr. Crepeau endeavored to induce market participants to purchase or sell his smaller orders through entry of his larger orders, and if successful, he cancelled his larger orders. The two regulators claimed that Mr. Crepeau repeated this trading technique on multiple occasions.

Mr. Crepeau agreed to pay a fine of US $120,00o to settle his CFTC enforcement action and US $30,000 to resolve his CBOT disciplinary matter. He also consented not to trade futures contracts or related options, as well as swaps, or certain other enumerated financial instruments under the CFTC’s oversight for four months.

Separately, the New York Mercantile Exchange resolved a disciplinary action against Sage Refined Products, Ltd. (“SRP”). A NYMEX business conduct committee alleged that the firm executed numerous block trades for customers involving various NYMEX energy products between July and December 2017 but failed to report the executions within mandatory time frames and did not report accurate trade details. The NYMEX BCC also claimed that SRP did not adequately train or supervise its employees. SRP consented to remit a penalty of US $135,000 to settle this matter.

Additionally, Credit Suisse International agreed to pay a fine of US $95,000 for allegedly violating a position limit in the palladium futures contract that became effective as of close of business on May 30, 2018. NYMEX claimed this violation occurred despite the exchange notifying CSI of the position limit during the day on May 30. Finally, Willowbridge Associates Inc. also agreed to a sanction of US $25,000 for purportedly violating a position limit in the Henry Hub National Gas futures contract for one day on June 25, 2018.

Compliance Weeds: Early last year, the CFTC and the Department of Justice coordinated announcements regarding the filing of civil enforcement actions by the CFTC, naming five corporations and six individuals, and criminal actions by the DOJ against eight individuals – including six of the same persons named in the CFTC actions – for engaging in spoofing activities in connection with the trading of futures contracts on US markets. Two of the corporations that resolved their CFTC enforcement actions were Deutsche Bank AG and its wholly owned subsidiary Deutsche Bank Securities Inc., a CFTC-registered futures commission merchant; they agreed to jointly and severally pay a fine of US $30 million. Although the purported problematic trading activity was undertaken by employees of DB, DBSI was named in this action because of its alleged failure to supervise. According to the CFTC, while DBSI maintained a surveillance system that detected many instances of potential spoofing by DB traders, it failed to follow up on “the majority” of potential flagged issues. (Click here for background on the multiple CFTC and DOJ actions in the article “CFTC Names Four Banking Organization Companies, a Trading Software Design Company and Six Individuals in Spoofing-Related Cases; the Same Six Individuals Criminally Charged Plus Two More” in the February 4, 2018, edition of Bridging the Week.)

In 2016, the CFTC named Advantage Futures LLC, another FCM, in an enforcement action related to the firm’s handling of the trading account of one customer in response to three exchanges’ warnings, among other matters. The firm and the two officers that were named as defendants agreed to pay a fine of US $1.5 million to resolve the CFTC action.

According to the CFTC, between June 2012 and April 2013, three exchanges alerted Advantage to concerns they had regarding the trading of one unspecified customer’s account which they considered might constitute disorderly trading, spoofing and manipulative behavior, in violation of the exchanges’ relevant rules. The CFTC claimed that Advantage initially failed “to adequately respond to the [exchanges'] inquiries and did not conduct a meaningful inquiry into the suspicious trading.” Only after the three exchanges threatened to hold Advantage responsible for its customer’s conduct did Advantage cut off the trader’s access to the three exchanges. However, Advantage failed to augment its oversight of the trader’s remaining trading or control his access to other exchanges “despite knowing that he employed the same strategy across all markets.” (Click here for background in the CFTC enforcement action against Advantage Futures in the article “FCM, CEO and CRO Sued by CFTC for Failure to Supervise and Risk-Related Offenses,” in the September 25, 2016 edition of Bridging the Week.)

Both the DBSI and Advantage cases suggest that the CFTC believes that FCMs have some type of oversight responsibility related to their customers’ trading to help ensure market integrity, and must take some appropriate action when they have knowledge of potential wrongdoing.

The CFTC’s aggressive view of law regarding FCMs supervisory obligations in the context of potential customer or affiliate disruptive trading has not been tested by a judicial decision. However, to help minimize the possibility of being subject to a CFTC enforcement action, FCMs should likely have procedures to internally escalate potential allegations of wrongdoing by customers and affiliates received from regulators and other third parties, and should consider proactive monitoring of some type on an ongoing basis for trading that may violate the law. The challenge of monitoring, however, is calibrating a system to identify meaningful potential exceptions so as not to be inundated by too many false positives and to ensure that data received and evaluated by the system does not unintentionally exclude any relevant order information. However, all alerts should be reviewed in some manner, and those reliably suggesting potential problematic conduct should be followed up. All monitoring should be documented.

  • Different Roads to Travel for Swap Execution Reform Proposed by CFTC Chairman and New Commissioner: CFTC Chairman J. Christopher Giancarlo and new commissioner, Dan Berkovitz, recently identified different concerns regarding current regulations pertaining to swap execution facilities and trade execution requirements and the optimal path to address existent obligations. 

Generally, Mr. Giancarlo advocated on behalf of recent rule proposals issued by the CFTC to modify swaps trading requirements on SEFs. In its proposals, the CFTC recommended, among other things:

  • amending the definition of a SEF to include certain swap brokering entities, including inter-dealer brokers and aggregators of single-dealer platforms; 
  • broadening the scope of the mandatory trade execution requirement to include swaps subject to a clearing requirement and listed by a SEF or designated contract market for trading; 
  • eliminating the current requirement that SEFs offer only order book or request-for-quote methods of execution and instead authorize SEFs to utilize more flexible alternative means of execution subject to enhanced disclosure requirements; and 
  • modifying the current mandate that SEFs offer participation on an impartial and non-discriminatory basis to solely require transparent, fair and non-discriminatory access to all “similarly situated” market participants. 

(Click here for background on the CFTC’s recent proposed amended SEF trading rules in the article “Over One Commissioner’s Vehement Dissent, CFTC Authorizes Publication for Comment Proposed Rules to Overhaul Swaps Trade Execution Requirements on Trading Facilities” in the November 11, 2018, edition of Bridging the Week.)

In a virtual appearance before the ABA Business Law Section, Derivatives and Futures Law Committee Winter Meeting, Mr. Giancarlo claimed that the CFTC’s proposals are generally warranted because the current SEF regime’s reliance on a series of no action letters and other temporary relief and guidance is untenable and easily reversible by a future administration, and because the current restrictions on execution may contribute to trading risks during a future liquidity crisis.

However, Mr. Giancarlo acknowledged that while he heard “strong interest” in replacing existing no-action relief and guidance with formal rule making, and eradicating the “most burdensome and unworkable” aspects of current SEF compliance during recent reach-outs to swaps market participants, he also received some criticism regarding the CFTC’s proposal, particularly with regard to the process and timing of bringing new swaps products into scope; recommended restrictions on off-SEF, pre-trade communications; and “simplified revisions” for impartial access.

Separately, in a pre-recorded appearance at the Commodity Markets Council State of the Industry Conference, Mr. Berkovitz criticized what he viewed as an attempt to dismantle the existing, generally successful, SEF regime. According to Mr. Berkovitz, “[t]here is plenty of data and economic evidence showing that the Commission’s current SEF rules have led to more competition, greater liquidity, more electronic trading, better price transparency, and lower prices for swaps that are traded on regulated platforms.” He opposed adoption of the proposed SEF trading rule amendments which he believes would lead to the creation of one class of markets where end users and proprietary traders would arrange purchases and sales of swaps with swap dealers, and a second category of markets, where swap dealers would exclusively trade with other swap dealers to lay off their risks at preferable prices that solely dealers could access.

Mr. Berkovitz indicated he was not opposed to targeted improvements to existing SEF rules that would expand floor trader registration, rationalize bank capital requirements that inhibit futures commission merchants to clear swaps, abolish name give-up and enable average pricing.

In his presentation before the ABA committee, Mr. Giancarlo, also advocated for the CFTC to replace its current entity approach to cross-border application of its swap regime with one based on “regulatory deference to third country regulatory jurisdictions that have adopted the G-20 swaps reforms” as proposed in an October CFTC white paper. (Click here for details regarding the white paper in the article “CFTC Proposes to Amend Rules to Track Previously Granted No-Action Registration Relief for CTAs and CPOs; Issues Cross-Border Swaps Reform White Paper” in the October 14, 2018, edition of Bridging the Week.) Mr. Giancarlo indicated that he will soon formally direct CFTC staff to draft cross-border rule proposals paralleling recommendations in the white paper for public comment.

My View: Last week the International Swaps and Derivatives Association published a thoughtful discussion of how differences in global standards in connection with derivatives could be addressed – particularly those related to capital, margin, clearing, trade execution and extraterritoriality. Most importantly, ISDA argued, “policy makers and market participants should continue to affirm the value and benefits of global markets in generating sustainable economic growth.” Specifically, policy makers should recognize how global markets contribute to sustained economic growth; reduce the gap between global standards and national regulation to ensure greater consistency; and implement risk-based frameworks to evaluate and recognize the comparability of different regulatory regimes. For smaller jurisdictions with limited market activity, ISDA recommended implementing global standards “when and where appropriate.” ISDA’s report is worth considering in light of the CFTC’s recent initiatives on SEF execution and its cross-border approach. (Click here to access the ISDA report,  “Regulatory Driven Market Fragmentation.”)

Kudos also to Chairman Giancarlo for proactively seeking out swaps markets participants and listening to their concerns, and apparently being willing to reflect on what he heard in the next stage of staff drafting of SEF trading reforms.

More Briefly:

  • Global Bank and NY Branch Fined US $40 Million by NY Financial Regulator for Attempted Manipulation of FX Markets: Standard Chartered Bank and Standard Chartered Bank, New York Branch (collectively, “SCB”) agreed to pay a collective fine of US $40 million to the New York State Department of Financial Services related to allegations that, from 2007 to 2013, SCB traders shared confidential customer information to coordinate with traders at other banks activity in foreign exchange that could improperly impact prices detrimentally for customers for the benefit of SCB. NY DFS also claimed that SCB attempted to manipulate trading benchmarks and prices in certain markets. The bank also agreed to enhance its internal controls for FX trading as part of its settlement. NY DFS acknowledged SCB’s full cooperation with its investigation and that SCB already had terminated the traders responsible for the allegedly fraudulent FX scheme.
  • FINRA Finds High Percentage of Order Routing Through Affiliated ATSs = Lower Order Fill Rate + Higher Execution Costs: The Financial Industry Regulatory Authority issued a research report indicating that a relatively high percentage of orders sent by broker-dealers through affiliated alternative trading systems tended to receive lower order fill rates and higher execution costs. FINRA’s study was based on a review of over 330 million institutional orders routed by 43 active broker-dealers involving 273 stocks during October 2016. FINRA’s study observed, however, that not all broker-dealers evidenced a preference to route orders to affiliate broker-dealers. The report concluded that improved disclosures regarding order handling could assist institutional clients with broker-dealer selection.
  • Related Firms Authorized by CFTC Staff Not to Combine Futures Positions for Speculative Limits Purposes Despite Shared Employee Trading Physical Commodities for Both Entities: Staff of the Division of Market Oversight of the Commodity Futures Trading Commission authorized two related entities to disaggregate their positions for purposes of computing each of their futures equivalent positions against speculative position limits despite one person being an employee of both entities. CFTC staff had been advised that the employee solely engaged in cash market trading of grain and had no involvement in any derivatives or hedging decision of either entity. 

Although entities with ten percent or more common ownership may be eligible to disaggregate their future equivalent positions to assess their speculative position limit compliance relying on the so-called “owned entity exemption,” such relief is contingent on each entity having no shared employees “that control the trading decisions of either.” (Click here to access CFTC Rule 150.4(b)(2).) The rule refers to trading generally and does not limit the term “trading” to derivatives. Previously, DMO staff authorized the application of the owned entity exemption where related entities were aware of cash market trading decisions of the other. (Click here to access CFTC No Action Letter 17-37, August 10, 2017.) Staff’s current no action relief is effective solely through April 12, 2019.

(Click here for background on the CFTC’s owned entity exemption in the article “CFTC Adopts Final Rules Related to Aggregation of Positions and Owned Entity Exemption; Re-Proposes Position Limits Rules” in the December 11, 2016, edition of Bridging the Week.)

Follow-up:

  • SEC Again Requests California Federal Court to Reconsider Denial of Preliminary Injunction Against Alleged Seller of Purported Unregistered Security in ICO: The Securities and Exchange Commission again asked a federal court in California to reconsider its November 2018 denial of a preliminary injunction against defendants accused by the agency of engaging in a fraudulent and unlawful offer and sale of securities. The court held against the SEC, claiming that the agency did not demonstrate that the cryptoassets purchased by investors were securities under applicable law. (Click here for details of the federal court’s November 2018 decision in the article “California Federal Court Rejects SEC’s View That Purportedly Fraudulent ICO Constituted a Security Offering – At Least for Now” in the December 2, 2018 edition of Bridging the Week.)

    Previously, in October 2018, the SEC successfully obtained a temporary restraining order against the defendants – Blockvest, LLC, and its chairman and founder, Reginald Buddy Ringgold, III a/k/a Rasool Abdul Rahim El – claiming that they engaged in fraud and the offer and sale of unregistered securities – cryptoassets called “BLV’s” – that initially were sold through presales to an initial coin offering and an ICO. The court denied the SEC’s request for a preliminary injunction against the defendants the following month.

In December 2018, the SEC first argued for a rehearing of the preliminary injunction denial, claiming that, in its November decision, the court misapplied existing law in saying that the SEC must prove an investment is a security based on the beliefs of individual investors rather than on an objective measure of the nature of the investment being offered to the public and imposed an “artificially high burden” on the SEC to obtain injunctive relief. The SEC argued that defendants promoted BLVs as if they were securities and that their purported wrongful conduct did not stop until after the court imposed the TRO against the defendants and they retained counsel. The SEC said that not granting a preliminary injunction solely because defendants promised to stop their offering ignored the gravity of defendants’ alleged prior unlawful conduct.

In response, defendants argued that the court had reasonably demonstrated there was no likelihood of future wrongdoing, and, in fact, no wrongdoing has occurred for the two months since the court’s order. Defendants also said that the court correctly applied applicable law in determining that the SEC had not proven that BLV tokens were securities. 

According to defendants, the court properly concluded that the SEC provided “no evidence” to support that investors expected profits (i.e., capital appreciation derived from “the development of [their] initial investment”) or a sharing of earnings generated from the use of their invested funds as they were required by applicable precedent. The defendants said this is required under the Supreme Court’s 1946 decision of SEC v. WJ Howey relied on by the SEC (click here to access this Supreme Court decision). The SEC discounted defendants’ arguments in a reply paper filed last week, reiterating arguments made in their first reconsideration brief.

In other legal and regulatory developments involving cryptoassets:

  • Florida Appellate Court Rules Seller of Bitcoin Engaged in Money Service Business: A Florida appellate court reversed a trial court’s dismissal of criminal charges against Michell Espinoza that charged him, among other things, with engaging in the business of a money transmitter or a payment instrument seller without being registered as a money service business. The trial court had claimed that Mr. Espinoza was not required to be licensed as an MSB because his alleged wrongful conduct pertained to transactions involving bitcoin and bitcoin did not constitute a financial instrument or a monetary instrument under Florida law. The appellate court disagreed. 

Although the appellate court conceded that bitcoin is not currency under Florida law, it said that bitcoin falls under the definition of payment instrument because it constitutes monetary value which means “a medium of exchange, whether or not redeemable in currency.” The appellate court also rejected defendant’s argument that he was not a money transmitter because he did not receive currency, monetary value or payment instruments for the purpose of transmitting the items to a third party, but solely acted as a seller of bitcoin. The court noted that nothing in the relevant Florida statute requires transmission to a third party for a person to qualify as a money transmitter; this contrasts with a parallel provision of US federal law overseen by the Financial Enforcement Crimes Network of the US Department of Treasury. (Click here to access 31 CFR § 1010.100(ff)(f)(i)(A).) The relevant Florida law solely states that an MSB is a person who "...receives currency, monetary value or payment instruments for the purpose of transmitting the same.” 

In his criminal charges, Mr. Espinoza was accused of receiving fiat currency from an undercover detective involved in unlawful conduct and sending bitcoin to the detective. The appellate court ruled that this conduct constituted the receipt of currency for the purpose of transmitting monetary value or payment instruments – mainly bitcoin – which qualified as both monetary value and payment instrument.

  • International Industry Organization Publishes Smart Contract Legal Guidelines: The International Swaps and Derivatives Association published legal guidelines for smart derivatives contracts. ISDA proposed that smart derivative contracts should comply with existing legal, regulatory and commercial standards in the derivatives industry; include only those parts of derivative contracts that are capable of being automated – typically operational as opposed to non-operational clauses; and be subject to legal validation. Moreover, ISDA proposed that only those provisions of ISDA documentation that can be effectively represented in “automatable form” should be automated. In October 2017, ISDA published a conceptual model of the required elements of trade events and actions in order ultimately to provide a “standard blueprint” regarding how derivatives are traded and managed through their lifecycle. (Click here for details in the article “ISDA Takes First Steps to Establish Foundation for Future Use of Distributed Ledger Technology and Smart Contracts” in the October 22, 2017, edition of Bridging the Week.)
  • Try It Again, VanEck SolidX Bitcoin Trust: Cboe BZX Exchange, Inc. has again filed with the Securities and Exchange Commission a proposed rule change to enable trading of shares of SolidX bitcoin shares issued by the VanEck SolidX Bitcoin Trust. As proposed, each share in the trust would represent a fractional interest in bitcoin holdings by the Trust. Cboe BZX initially filed its rule change in connection with the VanEck SolidX Bitcoin Trust ETF in June 2018 and withdrew it last month. (Click here for more details in the article “Cboe BZX Withdraws Proposal from SEC for Bitcoin ETF” in the January 27, 2019, edition of Bridging the Week.)

Legal Weeds: During September 2018, a federal court in Brooklyn, New York, declined to dismiss a criminal indictment against Maksim Zaslavskiy charging him with securities fraud and related offenses in connection with two cryptocurrency investment schemes and their related initial coin offerings. (Click here for background in the article “Brooklyn Federal Court Rules ICO-Issued Digital Assets Could Be Securities” in the September 16, 2018, edition of Bridging the Week.)

The different outcomes between Blockvest and Zaslavskiy – although resting on different preliminary presentations of facts – may herald an ultimate determination by a higher court as to what the expectation of profits accomplished through the efforts of others prong of the Howey test actually means. Although the Department of Justice and SEC have repeatedly argued that cryptoassets issued as part of presales to ICOs and ICOs are most often securities, investors in such digital assets do not typically expect to share any income from the project identified with the ICO and the value of their cryptoassets only remotely, if at all, is tied to the value of such projects. Moreover, investors in digital assets will likely have no claims on the assets of a project if the project goes bankrupt. 

  • CFTC Granted Delay to Consider Appealing Adverse Manipulation Decision: The US federal court that recently ruled against the Commodity Futures Trading Commission in its enforcement action charging DRW Investments, LLC and Don Wilson, its chief executive officer, with manipulation and attempted manipulation of the IDEX USD Three-Month Interest Rate Swap Futures Contracts granted the CFTC’s motion to extend the deadline by which the CFTC may file a notice of appeal to March 1, 2019. The CFTC had requested a delay because of the recent US government partial shut-down. (Click here for background on the US federal court’s decision against the CFTC in the article “Being Smarter Than Your Counterparties Is Not Manipulation Rules Judge in CFTC Enforcement Action” in the December 9, 2019, edition of Bridging the Week.)
  • New NFA CPO Internal Control Requirements Effective April 1: The National Futures Association’s recently proposed interpretive guidance to provide commodity pool operators with guidance to design and implement adequate systems of internal controls in order to comply with their general obligation of supervision will be effective April 1, 2019. Under NFA’s guidance, among other things, all CPOs must formally implement an internal control system designed to prevent fraudulent actions by employees, management and third parties; to help secure the integrity of customer funds; and to “provide reasonable assurance” that financial reports are accurate and that a CPO complies with applicable Commodity Futures Trading Commission and NFA requirements. (Click here for additional background in the article “NFA Proposes Internal Controls Framework to Enhance Supervision” in the December 16, 2018, edition of Bridging the Week.)

For further information

CFTC and CBOT Resolve Coordinated Enforcement Actions Against Alleged Soybean Spoofer:

CBOT:
https://www.cmegroup.com/notices/disciplinary/2019/01/cbot-16-0466-bc-kevin-crepeau.html#pageNumber=1
CFTC:
https://www.cftc.gov/sites/default/files/2019-01/enfkevincrepeauorder013119.pdf

CFTC Granted Delay to Consider Appealing Adverse Attempted Manipulation Decision:
/ckfinder/userfiles/files/DRW%20Order%20to%20Delay%20Filing%20for%20Appeal.pdf

Different Roads to Travel for Swap Execution Reform Proposed by CFTC Chairman and New Commissioner:

FINRA Finds High Percentage of Order Routing Through Affiliated ATSs = Lower Order Fill Rate + Higher Execution Costs:
http://www.finra.org/sites/default/files/OCE_WP_jan2019.pdf

Florida Appellate Court Rules Seller of Bitcoin Engaged in Money Service Business:
http://www.3dca.flcourts.org/Opinions/3D16-1860.pdf

Global Bank and NY Branch Fined US $40 Million by NY Financial Regulator for Attempted Manipulation of FX Markets:
https://www.dfs.ny.gov/about/ea/ea190129_standard_chartered.pdf

International Industry Organization Publishes Smart Contract Legal Guidelines:
https://www.isda.org/a/MhgME/Legal-Guidelines-for-Smart-Derivatives-Contracts-Introduction.pdf

New NFA CPO Internal Control Requirements Effective April 1:
https://www.nfa.futures.org/news/newsNotice.asp?ArticleID=5088

Related Firms Authorized by CFTC Staff Not to Combine Futures Positions For Speculative Limits Purposes Despite Shared Employee Trading Physical Commodities For Both Entities:
https://www.cftc.gov/sites/default/files/idc/groups/public/%40lrlettergeneral/documents/letter/2019-01/18-33.pdf

SEC Again Requests California Federal Court to Reconsider Denial of Preliminary Injunction Against Alleged Seller of Purported Unregistered Security in ICO:
/ckfinder/userfiles/files/SEC%20v_%20Blockvest%20Motion%20for%20Partial%20Reconsideration%20of%20the%20Court%27s%20Order%20Denying%20Preliminary%20Injunction.pdf
/ckfinder/userfiles/files/SEC%20v_%20Blockvest%2c%20LLC%20-%20Defendant%27s%20Opposition%20to%20Motion%20for%20Reconsideration%20of%20Denial%20of%20Preliminary%20Injunction(2).pdf
/ckfinder/userfiles/files/SEC%20v_%20Blockvest%2c%20LLC%20-%20Plaintiff%27s%20Reply%20in%20Support%20of%20Motion%20for%20Partial%20Reconsideration%20of%20Order%20Denying%20Preliminary%20Injunction.pdf

Try It Again, VanEck SolidX Bitcoin Trust:
http://cdn.cboe.com/resources/regulation/rule_filings/pending/2019/SR-CboeBZX-2019-004.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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JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • 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.