Securities

Recent Posts

FINRA Findings and Costs Not Sanctions Subject to SEC Appellate Jurisdiction
Posted on 17 Oct 2011 by Robert Fusfeld

This case is of interest to those who need to understand the SEC's interpretation of its jurisdiction over FINRA disciplinary actions. FINRA sanctioned Sharemaster for failing to file an annual audit by a firm registered with PCAOB. At issue... Read More

Sutherland Alert: FINRA’s All Public Panel Option Is Now Available in All Customer Cases
Posted on 10 Feb 2011 by Sutherland Asbill & Brennan LLP

by Bryan Ward The Securities and Exchange Commission recently approved a rule change that allows claimants to choose an arbitration panel made up entirely of public arbitrators. This change is applicable to all current customer cases in which FINRA... Read More

SEC Reversed Again by the D.C. Circuit
Posted on 14 Jun 2013 by Thomas O. Gorman

The SEC lost another case in the D.C. Circuit Court of Appeals. This time, however, it did not involve rule making. Rather, the action focused on the imposition of a life time bar from the securities business by FINRA which was affirmed by the Commission... Read More

Whither the OTCBB?
Posted on 9 Mar 2011 by David N. Feldman

The OTC Bulletin Board (known to all as the OTCBB) started in 1990 on a pilot basis and was made permanent in 1997. As of 1999 all OTCBB companies were required to be fully SEC reporting. Unlike major exchanges such as Nasdaq, where the relationship... Read More

FINRA Issues Guidance Notice on Confidentiality Provisions in Settlement Agreements and the Arbitration Discovery Process
Posted on 25 Nov 2014 by Doug Esten

by Jeff Kern and Manuel F. Gomez In Regulatory Notice 14-40 , FINRA reminds members that it is a violation of FINRA Rule 2010 (Standards of Commercial Honor and Principles of Trade) to incorporate into a settlement agreement a confidentiality provision... Read More

FINRA Issues Guidance Notice on Confidentiality Provisions in Settlement Agreements and the Arbitration Discovery Process
Posted on 25 Nov 2014 by Sheppard Mullin

by Jeff Kern and Manuel F. Gomez In Regulatory Notice 14-40 , FINRA reminds members that it is a violation of FINRA Rule 2010 (Standards of Commercial Honor and Principles of Trade) to incorporate into a settlement agreement a confidentiality provision... Read More

FINRA and Placement Agents
Posted on 9 Apr 2010 by Doug Cornelius

Will FINRA step in to prevent a ban on placement agents working with government investors? You may remember that last August, the SEC published a proposed rule that would create a prohibition on paying a third party, such as a placement agent, to... Read More

THIS WEEK IN SECURITIES LITIGATION (Week ending June 8, 2012)
Posted on 9 Jun 2012 by Thomas O. Gorman

As the insider trading trial of a former Goldman director continued in Manhattan, another insider trading probe moved to the playing field, according to a Reuters report. The probe reportedly focuses on a prominent retired baseball player and other athletes... Read More

This Week in Securities Litigation (March 25, 2011)
Posted on 25 Mar 2011 by Thomas O. Gorman

The Galleon insider trading trial continues this week in New York. In another New York court room the Commission struggled to have a partial settlement approved by the court. While the agency secured the necessary approval it was not without a cost... Read More

FINRA Requires BrokerCheck Link on Websites
Posted on 15 Oct 2015 by David N. Feldman

The Financial Industry Regulatory Authority (FINRA) regulates US broker-dealers, a “self-regulatory organization” run by the brokers themselves and overseen by the SEC. A very popular online resource is called BrokerCheck, which lets you pretty... Read More

THIS WEEK IN SECURITIES LITIGATION (Week ending May 25, 2012)
Posted on 26 May 2012 by Thomas O. Gorman

This week much of the news was dominated by two events. One was the difficulties and issues surrounding the IPO for Facebook. The other was the insider trading trial of Rajat Gupta, formerly a Goldman Sachs director. Congress heard testimony from SEC... Read More

A New Insider Trading Probe: The Senate Investigates the SEC
Posted on 25 May 2011 by Thomas O. Gorman

Insider trading has long been an SEC enforcement priority. While the Manhattan U.S. Attorney has brought the headline grabbing cases, the SEC has been equally aggressive in a series of actions which may redefine the insider trading (here). This has... Read More

For Goldman the ABACUS Deal Just Keeps Coming Back
Posted on 11 Nov 2010 by Thomas O. Gorman

The ABACUS deal has become the one that just will not go away for Goldman Sachs. First, the deal became the predicate for an SEC enforcement action against the pillar of Wall Street and one of its employees, Fabrice Tourre. That high profile case resolved... Read More

Finra Supervision and Unregistered Sale Sanctions Upheld
Posted on 7 Jan 2012 by Robert Fusfeld

World Trade Financial Corp., et. al. , Exchange Act Rel. 66114, January 6, 2012. World Trade, its president Rodney Michel, its supervisor of trading Jason Adams and Frank Brickell a rep appealed Finra sanctions. Finra found World Trade and Brickell sold... Read More

Grandmother Test Applied – FINRA Sanctions for Conversion of Customer Securities Upheld
Posted on 8 Dec 2010 by Robert Fusfeld

Mission Securities, Corp., Craig M. Biddick , Exchange Act Rel. 63453, December 7, 2010 Time since appeal filed - 8 months 6 days Time since last brief - 4 months 26 days FINRA found that Mission and Biddick, a rep at the firm converted... Read More

  • Blog Post: FINRA and Placement Agents

    Will FINRA step in to prevent a ban on placement agents working with government investors? You may remember that last August, the SEC published a proposed rule that would create a prohibition on paying a third party, such as a placement agent, to solicit a government client on behalf of the investment...
  • Blog Post: FINRA Guidance on Private Placements

    The Financial Industry Regulatory Authority released Regulatory Notice 10-22 reminding registered firms about their obligations regarding suitability, disclosures and other requirements for selling private placements to customers. A Broker-Dealer that recommends a security is under a duty to conduct...
  • Blog Post: The SEC, FinCEN and FINRA Sanction Broker

    The anti-money laundering and customer identification rules are important market policing tools monitored by the SEC, the Financial Crimes Enforcement Network or FinCEN and FINRA. Pinnacle Capital Markets LLC, a broker dealer whose customers are largely outside the United States, was sanctioned by...
  • Blog Post: For Goldman the ABACUS Deal Just Keeps Coming Back

    The ABACUS deal has become the one that just will not go away for Goldman Sachs. First, the deal became the predicate for an SEC enforcement action against the pillar of Wall Street and one of its employees, Fabrice Tourre. That high profile case resolved with an even higher profile settlement in...
  • Blog Post: Grandmother Test Applied – FINRA Sanctions for Conversion of Customer Securities Upheld

    Mission Securities, Corp., Craig M. Biddick , Exchange Act Rel. 63453, December 7, 2010 Time since appeal filed - 8 months 6 days Time since last brief - 4 months 26 days FINRA found that Mission and Biddick, a rep at the firm converted customer securities. Mission was expelled and...
  • Blog Post: Sutherland Alert: FINRA’s All Public Panel Option Is Now Available in All Customer Cases

    by Bryan Ward The Securities and Exchange Commission recently approved a rule change that allows claimants to choose an arbitration panel made up entirely of public arbitrators. This change is applicable to all current customer cases in which FINRA has not sent a list of arbitrators by the rule's...
  • Blog Post: FINRA Rule Not Retroactive

    In her remarks at PLI's SEC Speaks, SEC Commissioner discussed the question of retroactivity as it might apply to various provisions of Dodd-Frank (here). There are of course a number of provisions in the Act which enhance the authority of SEC enforcement. Whether any or all of those provisions...
  • Blog Post: Whither the OTCBB?

    The OTC Bulletin Board (known to all as the OTCBB) started in 1990 on a pilot basis and was made permanent in 1997. As of 1999 all OTCBB companies were required to be fully SEC reporting. Unlike major exchanges such as Nasdaq, where the relationship is between the exchange and the company, on the...
  • Blog Post: This Week in Securities Litigation (March 25, 2011)

    The Galleon insider trading trial continues this week in New York. In another New York court room the Commission struggled to have a partial settlement approved by the court. While the agency secured the necessary approval it was not without a cost: The court reserved the right to reconsider the...
  • Blog Post: A New Insider Trading Probe: The Senate Investigates the SEC

    Insider trading has long been an SEC enforcement priority. While the Manhattan U.S. Attorney has brought the headline grabbing cases, the SEC has been equally aggressive in a series of actions which may redefine the insider trading (here). This has been a strength of the retooled SEC enforcement...
  • Blog Post: FINRA Cannot Sue to Collect Fines

    FINRA has no authority to bring an action in federal court to collect fines it imposes on members according to the Second Circuit Court of Appeals. Likewise, a rule the SRO issued over two decades ago under which it claimed such authority is invalid. Fiero v . Financial Industry Regulatory Authority...
  • Blog Post: FINRA Findings and Costs Not Sanctions Subject to SEC Appellate Jurisdiction

    This case is of interest to those who need to understand the SEC's interpretation of its jurisdiction over FINRA disciplinary actions. FINRA sanctioned Sharemaster for failing to file an annual audit by a firm registered with PCAOB. At issue was whether or not an exemption from that requirement...
  • Blog Post: Finra Supervision and Unregistered Sale Sanctions Upheld

    World Trade Financial Corp., et. al. , Exchange Act Rel. 66114, January 6, 2012. World Trade, its president Rodney Michel, its supervisor of trading Jason Adams and Frank Brickell a rep appealed Finra sanctions. Finra found World Trade and Brickell sold unregistered stock and that Michel and Adams failed...
  • Blog Post: FINRA Sanctions For Unregistered Distribution Upheld

    Midas Securities, Jay S. Lee, Exchange Act Rel. 66200, January 20, 2012 This case is significant for two reasons. It restates clearly the duty that brokerage firms have to investigate sales of large amounts of stock of little known issuers. Most important, from a supervisory standpoint, it finds...
  • Blog Post: FINRA Sanctions Partially Upheld

    John Edward Mullins, Kathleen Maria Mullins , Exchange Act Rel. 66373, February 10, 2012 John Mullins was sanctioned by FINRA for converting customer property, misusing customer funds, borrowing from a customer without firm authorization, and failing to disclose outside activities to his firm...
  • Blog Post: PROTECTING INVESTORS IN THE U.S. AND ABROAD

    The SEC faces a variety of issues in protecting U.S. investors in the capital markets of this country. Other regulators in this country and abroad face similar issues in protecting investors. A sample of recent actions from other regulators includes: FINRA: Citigroup Global Markets was fined $3.5...
  • Blog Post: THIS WEEK IN SECURITIES LITIGATION (Week ending May 25, 2012)

    This week much of the news was dominated by two events. One was the difficulties and issues surrounding the IPO for Facebook. The other was the insider trading trial of Rajat Gupta, formerly a Goldman Sachs director. Congress heard testimony from SEC Chairman Mary Schapiro regarding the implementation...
  • Blog Post: THIS WEEK IN SECURITIES LITIGATION (Week ending June 8, 2012)

    As the insider trading trial of a former Goldman director continued in Manhattan, another insider trading probe moved to the playing field, according to a Reuters report. The probe reportedly focuses on a prominent retired baseball player and other athletes. Other items at the top of the news were a...
  • Blog Post: SEC Reversed Again by the D.C. Circuit

    The SEC lost another case in the D.C. Circuit Court of Appeals. This time, however, it did not involve rule making. Rather, the action focused on the imposition of a life time bar from the securities business by FINRA which was affirmed by the Commission on appeal. Saad v. Securities and Exchange...
  • Blog Post: FINRA Issues Guidance Notice on Confidentiality Provisions in Settlement Agreements and the Arbitration Discovery Process

    by Jeff Kern and Manuel F. Gomez In Regulatory Notice 14-40 , FINRA reminds members that it is a violation of FINRA Rule 2010 (Standards of Commercial Honor and Principles of Trade) to incorporate into a settlement agreement a confidentiality provision restricting or prohibiting a customer or other...
  • Blog Post: FINRA Requires BrokerCheck Link on Websites

    The Financial Industry Regulatory Authority (FINRA) regulates US broker-dealers, a “self-regulatory organization” run by the brokers themselves and overseen by the SEC. A very popular online resource is called BrokerCheck, which lets you pretty easily check the regulatory history and licenses...