Steven M. Felsenstein

Steven Felsenstein is co-chair of the firm’s Investment Regulation Group and co-chair of the firm’s Financial Regulatory and Compliance Practice.   Prior to joining the firm, Steven was a staff member in the Division of Corporation Finance and served as a Branch Chief in the Division of Investment Management at the U.S. Securities & Exchange Commission.  Steven advises investment companies registered under the Investment Company Act of 1940, investment advisers registered under the Investment Advisers Act, and other administrators and service providers involved in the industry.  Steven also represents broker-dealers and transfer agents registered under the Securities Exchange Act of 1934, and issuers of securities under the Securities Act of 1933.  Steven also represents clients in connection with administrative proceedings conducted by the SEC and FINRA, and participates in related actions.

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Qualifying Assets Under Investment Company Act Section 3(c)(5)(C) Mortgage Exemption

On Aug. 15, 2019, the staff of the Division of Investment Management at the U.S. Securities and Exchange Commission (the “Staff”) issued a significant no-action letter. The letter clarifies the treatment of certain assets held by an entity seeking to rely upon Section 3(c)(5)(C) to be exempt from registration as an investment company under the Investment … Continue Reading

Amendments to ‘Volcker Rule’ to Exclude Certain ‘Small’ Banks From Key Prohibitions

In connection with the U.S. financial crisis 10 years ago, legislation was adopted to enhance the safety and soundness of the commercial banking system in the United States. Amendments to the Bank Holding Company Act of 1956 required five federal financial agencies to adopt joint regulations to (i) limit the authority of commercial banking institutions to … Continue Reading

FINRA Wants to Hear From Firms BEFORE They Go Crypto

In 2018 the Financial Industry Regulatory Authority (FINRA) undertook efforts to have member firms contact FINRA before engaging in activities involving digital assets by issuing Regulatory Notice 18-20. That approach led to many discussions between FINRA staff and member firms, and FINRA found that process useful to help it become aware of developing practices and … Continue Reading

Cryptocurrencies and Unclaimed Property: Potential Implications of State Escheat Laws for the Blockchain Technology Industry

The use of blockchain technology and the issuance of cryptocurrencies have grown considerably in recent years, inviting heightened scrutiny and regulation. While federal securities, tax, and other financial services regulatory agencies, such as the SEC, the IRS, state securities commissioners and others, have begun applying their rules and regulations to cryptocurrency businesses, the cryptocurrency industry … Continue Reading

SEC Order Seeks to Clarify Steps Forward Following Lucia

In a previous GT Alert, we summarized and analyzed the Supreme Court’s June 21, 2018, decision in Lucia v. Securities & Exchange Commission, 138 S. Ct. 2044 (2018). That GT Alert cited the SEC’s 30-day stay of “all administrative proceedings” “before an administrative law judge” and foretold continued uncertainty concerning the status of administrative law … 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

SCOTUS Decision Affects Diversity Jurisdiction of Business Trusts

Many registered investment companies and real estate investment trusts are organized as business trusts.  Certain states, such as Maryland, Delaware, and Massachusetts have been hospitable to such entities, and therefore are home to many of these entities.  In some states, such as Massachusetts, the entities are formed as common-law trusts, while in others there is … Continue Reading

SEC Acts to Enhance Oversight of Funds and Advisers

During recent months the SEC has made a number of announcements regarding its efforts to enhance and expand its oversight and inspections of registered investment companies and investment advisers. Of significance in this regard was the announcement of plans to hire additional examiners and reassign some existing examiners to expand the staff available for inspections of … Continue Reading

FINRA Accelerates Public Reporting of Certain Disclosure Information

On Nov. 30, 2015, the SEC approved a change to FINRA’s rule regarding release of certain disclosure information on the BrokerCheck Website. The change will release certain adverse information reported to BrokerCheck on Form U4, U5, or U6, three days after such information is received by FINRA, rather than the current fifteen days. FINRA has announced that … Continue Reading

A Shift of Emphasis at the DOJ – the Yates Memo

On September 15, 2015, Deputy Attorney General Yates issued a memo shifting the focus of federal prosecutorial efforts with respect to corporate wrong-doing. The memorandum encouraged DOJ prosecutors who identify corporate wrong-doing to shift the emphasis, at least in part, to the individuals who commit corporate wrong-doing, rather than focusing only on the entity. (This … Continue Reading

Wendy Li to Speak at the Annual Saratoga Institute on Equine, Racing & Gaming Law Conference

Wendy Li, shareholder of Greenberg Traurig, will be speaking at the 15th Annual Saratoga Institute on Equine, Racing & Gaming Law Conference at Saratoga Springs, New York from August 11-12. The annual program organized by the Government Law Center of Albany Law School, is dedicated to exploring the legal and public policy implications of racing … Continue Reading

New York State Releases Final BitLicense Regulation

On June 3, 2015, the New York State Department of Financial Services (DFS) published its final BitLicense regulation. The regulation requires that firms engaged in “Virtual Currency Business Activity” that involves New York State or a New York resident apply to DFS for a BitLicense within 45 days of its effective date. In this Alert, … Continue Reading

Jennifer Gray to Speak at the Mortgage Servicing Compliance on June 25th

Jennifer Gray, Shareholder, will be presenting at the American Conference Institute 4th Bank & Non-Bank Forum on Mortgage Servicing Compliance Conference in Dallas, TX from June 25-26. The conference will provide attendees with the latest insights and advice on various topics, including challenges with mortgage loan servicing transfers, CFPB servicing rules update, strategies for servicers … Continue Reading

SEC Action on Unregistered Broker-Dealers

On March 26, 2015 the U.S. Securities and Exchange Commission announced the settlement of charges against nearly two dozen individuals and entities. Most were charged with acting as a broker-dealer without registering under the Securities Exchange Act of 1934, and the one licensed firm was charged for enabling that conduct and paying compensation to those … Continue Reading

Payments to Unregistered Persons – The Next Round

The role of the Financial Industry Regulatory Authority (FINRA) regarding payments to unlicensed persons for securities-related and capital-raising activities has expanded. This post gives an overview of the FINRA Rule 2040 (approved by the SEC on Dec. 30, 2014) which governs when and how registered broker-dealers can provide compensation to unregistered persons. Approval of Rule … Continue Reading
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