Category Archives: SEC

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Greenberg Traurig’s Carl Fornaris and William Mack Participate at FMA’s Legal and Legislative Issues Conference

Shareholders Carl A. Fornaris and William B. Mack of global law firm Greenberg Traurig, LLP will be participating at the Financial Markets Association’s 2017 Treasury and Capital Markets Legal and Legislative Issues Conference, Oct. 25 – Oct. 26. Mack is also a member of the conference’s 2017 Program Planning Committee. Fornaris will be moderating, “Recent … Continue Reading

August 2017 Cybersecurity & Risk Alert from SEC

On August 7, 2017, the SEC’s Office of Compliance Inspections and Examinations (OCIE) issued its third National Exam Program Risk Alert of the 2017 calendar year, detailing OCIE’s findings and observations from its Cybersecurity 2 Initiative. This Cybersecurity 2 Initiative, the name for OCIE’s second round of cybersecurity examinations, builds on OCIE’s prior 2015 Cybersecurity … Continue Reading

SEC and FINRA Continue to Root Out Bad Brokers

On Thursday, July 27, regulators and industry professionals gathered in Washington, D.C. to discuss the current regulatory environment, cybersecurity, and other hot topics at the SEC and FINRA’s 2017 National Compliance Outreach Program for Broker-Dealers. The panelists, including SEC Commissioner Michael Piwowar, FINRA President and CEO Robert Cook, and Susan Axelrod, the Executive Vice President of … Continue Reading

SCOTUS to Resolve Circuit Split Over Dodd-Frank Whistleblowers

On Monday, June 26, 2017, the U.S. Supreme Court agreed to review whether the Dodd-Frank Act (DFA) prohibits retaliation against internal whistleblowers or only covers individuals who report to the U.S. Securities and Exchange Commission (the SEC). This question has divided practitioners and lower courts alike since Dodd-Frank’s passage in 2010. As reported in our … Continue Reading

Confidential Financial Information of Non-Party Customers Placed at Risk When Litigants Subpoena FINRA Enforcement Files

An increasingly common tactic among claimants’ lawyers in Financial Industry Regulatory Authority (FINRA) arbitrations is to issue subpoenas to securities regulators, including FINRA itself, calling for the production of investigative files. This is accomplished by asking the arbitration panel to issue a subpoena pursuant to FINRA Rule 12512 (or Rule 13512 in an employee versus … Continue Reading

The Supreme Court Agrees to Determine Whether SEC Actions Seeking Disgorgement are Subject to the Five-Year Limitations Period Set Forth in 28 U.S.C. § 2462

At the urging of both an individual petitioner and the SEC, the Supreme Court has agreed to resolve a recent circuit split as to whether the five-year limitations period applicable to SEC enforcement actions applies to the remedy of disgorgement. Kokesh v. SEC, __ S. Ct. __, No. 16-529, 2017 WL 125673 (U.S. Jan. 13, … Continue Reading

SEC’s Office of Compliance Inspections and Examinations Releases Annual Examination Priorities

On Jan. 12, 2017, the Office of Compliance Inspections and Examinations (OCIE) of the U.S. Securities and Exchange Commission (SEC) issued its annual Examinations Priorities for 2017 (Exam Priorities), which is available for download here.  As in past years, the Exam Priorities focus around three thematic areas, the first and the last of which are … Continue Reading

The 10th Circuit Declares SEC’s Home Courts to be Unconstitutional and Creates Circuit Split

Right after Christmas, the United States Court of Appeals for the Tenth Circuit delivered a lump of coal to the Securities and Exchange Commission in Bandimere v. U.S. SEC,1 ruling that the SEC’s administrative law judges (ALJs) who preside over SEC enforcement actions hold their positions in violation of the Appointments Clause of the United States Constitution. … Continue Reading

SEC Convenes Fintech Forum

On Nov. 14, 2016, the Securities and Exchange Commission (SEC) hosted an all-day forum on FinTech ( Forum).  The event highlighted the active role the SEC intends to take in monitoring and regulating technological innovation based upon the potential impact of innovation on investors and capital markets. In her remarks to Forum attendees, SEC Chair … Continue Reading

SEC Continues Enforcement Push as Outlined in its Announcement of FY 2016 Statistics

In an announcement this week related to FY 2016 enforcement statistics, the SEC reported another increase and outlined its continued robust efforts.  In 2016, the SEC filed 868 enforcement actions besting its 2015 total by 61 actions and 2014 by 113 actions.  Although enforcement actions were up, the SEC announced that it had obtained judgments … Continue Reading

The DOL Fiduciary Duty Rule: Impact on Cash Solicitors for Advisory Firms

Under Rule 206(4)-3, adopted by the U.S. Securities and Exchange Commission pursuant to the Investment Advisers Act of 1940 (and under a number of parallel state securities laws or regulations), an investment adviser may compensate a cash solicitor who is not otherwise connected to the advisory firm for soliciting and referring prospective clients to the … Continue Reading

New ADV Rule

Today, the SEC announced the adoption of amendments to several rules under the Investment Advisers Act of 1940 and to Form ADV, the investment adviser registration and reporting form. Although there is a long lead-in time to get in compliance with the new rules and Form ADV, advisers should consider beginning work now to ensure compliance … Continue Reading

SEC Scrutinizes Severance Agreements for Compliance With Dodd-Frank

Recent SEC Fines On Aug. 16, 2016, the U.S. Securities and Exchange Commission (SEC) announced that it had issued its second fine in as many weeks concerning a company’s use of severance agreements that contain confidentiality and/or covenant-not-to-sue or release provisions that allegedly violate SEC whistleblower Rules. These recent SEC charges arise from SEC Rules, … Continue Reading

FINRA Sends Targeted Exam Letter Concerning the Sale of Non-Traded Business Development Companies

FINRA recently sent a sweep letter (or targeted exam letter) to select broker dealers, inquiring about those firms’ sale of non-traded Business Development Companies (BDCs).  BDCs are SEC-registered investment companies (usually closed-end funds) that pool investor funds in a debt or equity portfolio (typically of small- or medium-sized companies), with the objective of generating income … Continue Reading

SEC Share Class Sweep of Registered Investment Advisers Appears to be Underway

On July 13, 2016, the SEC’s Office of Compliance Inspections and Examinations (OCIE) announced its 2016 Share Class Initiative (the Initiative). The Initiative is focused on addressing the perceived risk that registered investment advisers may be providing conflicted advice to their clients when recommending investments in mutual fund share classes.  For example, OCIE staff is … Continue Reading

SEC IM Guidance Update – Investment Company Business Continuity Plans

In connection with the Press Release announcing a Rule Proposal regarding adoption of written business continuity and transition plans by SEC-registered investment advisers (see our blog post on the topic), the Division of Investment Management also distributed a Guidance Update (No. 2016-04) discussing BCPs for registered investment companies (RICs).  RICs have been expected to address … Continue Reading

New SEC Rule Proposal – Written Business Continuity and Transition Plans for Registered Advisers

Earlier this week, the SEC issued a Press Release announcing a Rule Proposal that would require SEC-registered investment advisers to adopt written business continuity and transition plans (BCP) as part of their compliance program.  The comment period on the Rule Proposal is expected to close in September.  Under the proposed rule, an adviser’s written BCP … Continue Reading

SEC Raises Net Worth Threshold for ‘Qualified Client’ Status to $2.1 Million Effective Aug. 15, 2016

As it previously signaled it would do, on June 14, 2016, the SEC issued an Order (available here) increasing the net worth threshold for qualification as a “qualified client” under Rule 205-3 under the Advisers Act from $2 million to $2.1 million (the SEC did not adjust the assets under management of the adviser threshold, … Continue Reading

SEC Issues No-Action Letter on Custody Rule

On April 25, 2016, the SEC issued a no-action letter to the Investment Advisers Association clarifying its views on the application of Rule 206(4)-2 under the Advisers Act (the Custody Rule) to situations involving a sub-adviser in an investment advisory program for which a related person qualified custodian is the primary adviser and the primary … Continue Reading

SEC Seeks Additional Resources for Examination and Enforcement in FY 2017 Budget Request

The Securities and Exchange Commission (SEC) recently presented the President’s Fiscal Year 2017 budget request for the SEC to Congress.  Among the notable requests, the SEC seeks significant additional resources for increased examination coverage, primarily of investment advisers and investment companies but also related to broker dealers, crowdfunding portals, and other entities.  The SEC also seeks … Continue Reading

Propriety of Constitutional Challenges to Agency Administrative Proceedings Discussed by Federal Regulators, and Supported by at Least One

Top enforcement chiefs from the SEC, CFTC, DOJ and FINRA participated on a panel discussion of current enforcement trends and issues during the Current Enforcement Issues Panel discussion as part of this week’s SIFMA Compliance and Legal Division annual seminar.    The agenda at the SEC dominated much of the discussion. SEC Enforcement Director Andrew Ceresney … Continue Reading

SEC Continues its Focus on Advisory Fees

The SEC recently brought a settled enforcement action against an SEC-registered investment adviser and its CEO/CCO that represents a continued focus on the calculation of advisory fees. On March 2, 2016, the SEC charged Marco Investment Management, LLC (the Adviser), and its CEO/CCO, Steven Marco (Marco), with charging certain clients advisory fees that were calculated in … Continue Reading

SEC Announces National Compliance Outreach Seminar for Investment Adviser, Investment Company Personnel

On March 9, the SEC announced that it would be holding a Compliance Outreach Program for investment adviser and investment company senior officers on April 19, 2016, at the SEC’s headquarters in Washington, D.C. (the press release is available here).  Registration opened on Tuesday (March 8), and closes on March 29, 2016 (the registration form … Continue Reading

Eleventh Circuit Raises Important Questions About Challenging the Constitutionality of SEC Administrative Proceedings

Two weeks ago, the United States Court of Appeals of the Eleventh Circuit heard oral argument in consolidated appeals by the SEC to overturn two orders preliminarily enjoining its administrative proceedings in unrelated cases, Gray Financial v. SEC, No. 15-13738 (11th Cir.) and Hill v. SEC, No. 15-12831 (11th Cir.).  In both cases, United States … Continue Reading
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