Written by: Jessica R. Bogo A Financial Industry Regulatory Authority (“FINRA”) hearing panel held that FINRA’s own rules prohibiting judicial class action waivers in broker-dealer customer arbitration agreements are preempted by the Federal Arbitration Act and unenforceable. Once this decision becomes final, it will likely change the landscape of broker-dealer…
On February 21, 2013, the Staff of the Securities and Exchange Commission (the “Staff” and the “SEC,” respectively) published its 2013 priorities for the National Examination Program (“NEP”) in order to provide registrants with the opportunity to bring their organizations into compliance with the areas that are perceived by the…
Written by: Jay Gould The Securities and Exchange Commission (the “SEC”) recently charged and entered into consent decrees with four India-based brokerage firms for providing brokerage services to U.S. investors without being registered as broker dealers under the U.S. securities laws. This otherwise mildly interesting enforcement action by the SEC…
Written by: Jay Gould and Peter Chess On July 1, 2010, the Securities and Exchange Commission (the “SEC”) adopted Rule 206(4)-5 under the Investment Advisers Act of 1940, as amended, which prohibited an investment adviser from providing advisory services for compensation to a government client for two years after the…
Written by: Jay Gould and Peter Chess The Financial Industry Regulatory Authority (“FINRA”) released new guidance last month regarding new FINRA Rule 2111 (the “Suitability Rule”), which requires a broker-dealer to have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is…
Written by: Jay B. Gould, Michael Wu and Peter Chess Note: Pillsbury and KPMG, along with the California Hedge Fund Association, will be sponsoring a “Managers Only” event on the JOBS Act and the new world of “general solicitation” for Funds on June 14. The Jumpstart Our Business Startups Act…
Written by: Jay B. Gould and Peter Chess On April 18, 2012, the Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading Commission (“CFTC”) voted to adopt rules defining “swap dealer,” “security-based swap dealer,” “major swap participant,” and “major security-based swap participant,” among other terms, as mandated by the…
Written by Peter J. Chess On November 30, 2011, FINRA and the SEC’s Office of Compliance Inspections and Examinations (OCIE) released a National Exam Risk Alert on effective procedures and policies for broker-dealer branch inspections. This follows other recent guidance for broker-dealers regarding the Market Access Rule and reasonable investigations…
Written by Ildiko Duckor An entity that meets the definition of a “Large Trader” after October 3, 2011 must file its initial Form 13H with the SEC by December 1, 2011 to be assigned a large trader identification number (LTID). The filing is done electronically through the SEC’s EDGAR system. …
Written by Jay Gould On October 18, 2011, the SEC released a notice of FINRA’s filing of Proposed Rule 5123 (the “Proposed Rule”) which would require FINRA members and associated persons to: 1) provide to investors disclosure documents in connection with private placements prior to sale and 2) file with…