Arthur Don to Speak at ACA’s Spring 2017 Compliance Conference in Florida

Posted in Events, Investment Regulation

Arthur Don, co-chair of the Investment Regulation Group, will participate in the ACA Spring 2017 Compliance Conference, Thursday, May 4, in Florida.

Arthur will speak on the panel, “Business Continuity: What Should Advisors be doing Now?” which will focus on mergers and acquisitions of advisory firms, incapacitation of a key man, and winding down.  The panel will also address the recently proposed SEC Rule 206(4)-4, which will require advisers to develop business continuity plans designed to mitigate the impact of business disruptions or transitions. He will discuss the details of the rule and what advisers should be taking into consideration as they build out their plans.

Jennifer Gray to Speak at MBA Legal Issues & Regulatory Compliance Conference

Posted in Events, Litigation, Real Estate

Jennifer L. Gray, co-chair of the Consumer Financial Services Litigation Practice, will be speaking at the 2017 Mortgage Bankers Association (MBA) Legal Issues & Regulatory Compliance (LIRC) Conference. This four-day event will take place May 7-10, 2017, at the InterContinental Miami.

Gray will be presenting on the panel “Litigation Forum: TILA, RESPA, ECOA, FHA,” taking place at 1 p.m., Sunday, May 7. This panel of litigators will examine the latest activity around the Truth-in-Lending Act (TILA), Real Estate Settlement Procedures Act (RESPA), Equal Credit Opportunity Act (ECOA), and fair lending, including recent cases heard by the Supreme Court, U.S. Courts of Appeal, and other courts affecting the industry.

No “Sandbox” in Germany

Posted in Fintech

British start-ups in the financial sector enjoy more freedom – is that better?

Innovative providers of financial services in Great Britain are allowed into the sandbox: In the “Regulatory Sandbox”, such undertakings can test their business models in the market under less stringent regulatory supervision before becoming obliged to fulfill stricter regulatory requirements. In Germany, this idea has encountered some resistance.

The first supervisory authority to do so anywhere in the world, the British Financial Conduct Authority (FCA) started the promotional programme “Regulatory Sandbox” at the beginning of last year. It gives technology-driven financial services providers (fintechs) the possibility to test their products in the market for some time on the basis of a simplified procedure – and under close guidance and supervision by the FCA – before they submit to the full regulatory regime. Whereas some of these undertakings offer typical banking services as well as giro accounts and the processing of payments, others provide further services  in addition  to the  classical services, e.g. swarm financing and the like.

No “little buckets and spades” for German fintech companies – this is how clearly it was put by Felix Hufeid, President of the German Federal Financial Services Supervisory Authority (Bafin), at the beginning of this year. All fintech companies are governed by the strict regulatory requirements of financial regulatory law. They can put their innovative business models on the market only once they have obtained the permit necessary for this from the Bafin or the European Central Bank (ECB). This especially concerns business models which involve banking services, financial services or payment services, the management of investment assets or the issuance of e-money.

But to obtain this permit, fintech companies must overcome high obstacles. Thus, depending on the business model, they must put up a considerable amount of initial capital, set up a risk management system, show the professional competence and reliability of the managing directors, and install an IT safety system. This raises considerable difficulties especially for many start-ups.

But in Germany, the British sandbox arrangement has met with little enthusiasm so far on the part of the supervisory authorities. The Bafin maintains its opposition. From a legal point of view, this is ultimately also a consistent position. The Bafin has no authority to allow exceptions to the mandatory requirements of financial regulatory law. Moreover, it has not been authorized by the legislator to promote individual undertakings.

Also numerous representatives of the German fintech scene have expressed views critical of the introduction of a sandbox following the British model and have rejected any “regulatory honeymoon”. They fear that such special treatment could damage the reputation of the companies concerned, and they emphasize that they wish to be taken just as seriously as the established players in the financial services sector. This is essentially right. The high regulatory requirements do represent considerable challenges faced by fintech start-ups. But at the same time, they induce the market to give these start-ups the benefit of the doubt. A regulatory sandbox for these companies would undermine this trust and unsettle both clients and investors. This would put the fintechs at a disadvantage which could not be made up for merely by innovative ideas.

Moreover, already today a start-up which cannot or does not want to fulfill the regulatory requirements has the possibility to realize its ideas in cooperation with a licensed cooperation partner. Once the product has proved its value in the market, the start-up can still apply to the regulatory authority for a permit and risk the step into independence. All things considered, the stronger regulatory framework  is thus an advantage for Germany as a business location.

Greenberg Traurig to Host the Second Atlanta-Israel FinTech Innovation Conference

Posted in Events, Fintech

May 22-23, 2017, Greenberg Traurig’s Atlanta office will host the second Atlanta-Israel FinTech Innovation Conference.

With over 100 guests expected, the conference brings together both U.S. and Israeli companies seeking synergy and collaboration opportunities. U.S. companies attend fin search of “cutting edge” Israeli technologies and Israelis leverage the event to showcase their technologies and make important contacts. The conference allows for many networking opportunities including one-on-one meetings.

The conference will be led for the second consecutive year by Greenberg Traurig’s David Schulman, Intellectual Property & Technology shareholder at the Atlanta office and an active member of the firm’s Israel Practice.

For more information please visit:

2017 Atlanta-Israel FinTech Innovation Conference in the news:

Japanese Fintech Regulation Update: New Law & Regulations on Electronic Banking Settlement Agency Service

Posted in Fintech

The Financial Service Agency of Japan (JFSA) submitted a bill (Bill) to the National Diet to amend the Banking Act (Act No. 59 of 1981, as amended, the Banking Act) on March 3, 2017, to employ a new regulation on the electronic banking settlement agency service (Electronic Settlement Agency Service or Service), which provides agent services for bank account holders, such as giving a remittance instruction to banks or receiving bank account information from a bank on behalf of such account holders.

To learn more about this topic area please see GT AlertJapanese Fintech Regulation Update: New Law & Regulations on Electronic Banking Settlement Agency Service.”

Carl Fornaris to Speak at the Financial Markets Association’s 26th Annual Securities Compliance Seminar

Posted in Events, Financial Regulation

Greenberg Traurig Shareholder  Carl A. Fornaris, co-chair of the Financial Regulatory and Compliance Practice, will speak at the Financial Markets Association’s (FMA’s) 26th Annual Securities Compliance Seminar on April 26 at the B Ocean Hotel in Fort Lauderdale.

Fornaris will speak on the panel titled “Key 2017 Legislative and Regulatory Initiatives” and will review current developments and hot topics in banking and securities law and regulation affecting financial institutions. The panel will identify the likely priorities of the new administration and Congress, including prospects for legislative reform, law enforcement trends, and developments affecting customer protection.

Greenberg Traurig is a sponsor of the seminar.

Ninth Circuit Widens Circuit Split on Whether Dodd-Frank Protects Internal Whistleblowing

Posted in Dodd-Frank, Sarbanes-Oxley Act

On March 8, 2017, in Somers v. Digital Realty Trust Inc., No.15-cv-17352 (9th Cir., March 8, 2017), the Ninth Circuit Court of Appeals affirmed the district court’s denial of the defendant’s motion to dismiss a whistleblower claim brought under the Dodd-Frank Act’s (“DFA”)’s anti-retaliation provision.

In a 2-1 decision, the majority endorsed the approach of the Second Circuit, and not that of the Fifth Circuit, in holding that Congress did not intend to limit DFA whistleblower protections to only those who disclose information to the Securities and Exchange Commission (“SEC”). Rather, the court held that the DFA anti-retaliation provision also protects those who are fired after making internal disclosures of allegedly unlawful activity under the Sarbanes-Oxley Act (“SOX”) and other securities laws, rules, and regulations.

To learn more, please see GT AlertNinth Circuit Widens Circuit Split on Whether Dodd-Frank Protects Internal Whistleblowing.”



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

Posted in Financial Regulation, FINRA, Litigation, SEC, Securities

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 firm case). The respondent firm typically opposes the issuance of such a subpoena on a number of grounds, including the fact that securities regulators have much broader investigative powers than do private litigants and often demand and collect large amounts of personal confidential information (PCI) about customers and employees who may not be parties to the arbitration in which the subpoena is sought.

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Lex Machina’s Securities Litigation Report 2017 Names Greenberg Traurig a Top Federal Securities Defense Firm

Posted in Financial Services Litigation, Securities

According to the report issued last week, Greenberg Traurig is among the top 15 firms in the United States, defending national and global financial institutions against bet-the-company securities litigation cases. The report found that securities case filings rose 23 percent from 2015 to 2016, to 1,144 cases. According to Lex Machina, securities litigation is relatively steady compared to other areas of the law, with little variability from year to year. The number of securities cases in a given year tends to depend on macroeconomic trends, so if there is little variability in the national economy, litigation would be expected to remain the same, but a downturn could result in an increase in securities suits.

GT attributes its strength in this area to the fact that the firm has one of the broadest and deepest securities litigation practices in the country. The firm has been lead defense counsel in hundreds of securities class actions, derivative lawsuits, and SRO, state and SEC investigations and enforcement actions. These include some of the largest and most complex regulatory actions ever filed and one of the most highly publicized securities fraud cases in recent times. The firm has one of the most experienced and largest teams in the United States representing both market leading broker-dealers and Directors and Officers to final award or judgment in thousands of securities arbitrations and trials throughout the country. The team has tried some of the largest arbitration cases to verdict, including numerous matters involving more than $100 million. The attorneys regularly handle matters before the Financial Industry Regulatory Authority Dispute Resolution, American Arbitration Association, National Futures Association, and state and federal courts across the country.

President Trump to Nominate CFTC Acting Head J. Christopher Giancarlo

Posted in Commodities, Dodd-Frank

President Trump has announced his intention to nominate Commodity Futures Trading Commission (CFTC) acting head J. Christopher Giancarlo as permanent chairman. This news is of high importance for the alternative investment community, which will be impacted by  Giancarlo’s regulatory vision for the agency and Dodd-Frank reform.  As a Republican commissioner at the agency since 2014, and more recently as its interim chairman, Giancarlo has openly criticized crucial portions of the Dodd-Frank Act. While a president does not have the power to unilaterally repeal an Act such as Dodd-Frank, a vote by Congress could. In this case, however, it does not appear that the necessary votes for such action are there. The alternative investment community is focusing on the impact that Chairman Giancarlo could have on the agency’s plans regarding the enforcement of Dodd-Frank and its related rules.