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The BD/IA Regulator Providing securities regulatory, enforcement and litigation trends for broker-dealers, investment advisers and investment funds

Tag Archives: securities

Additional Fees on Securities Transactions – FINRA Sees No Justification

Posted in Broker-Dealer Regulation, FINRA Enforcement

In an area of broker-dealer practices with relatively little guidance—the appropriate level of commissions or mark ups on securities trades—FINRA recently brought another in a series of cases that provides insight into the regulator’s view on additional transaction-based fees.  In this particular case, FINRA found that a broker-dealer characterized a $60.50 charge on its customer… Read More

FINRA Sanctions a Broker for Violating Japanese Insider Trading Law

Posted in FINRA Enforcement

On July 2, 2014, FINRA announced that it barred a former equity trader from the securities industry based on its finding that he violated Japanese insider trading law by trading in the securities of a Japanese company listed on the Tokyo Stock Exchange, resulting from a tip that the trader received indirectly from an insider… Read More

A View of EB-5 Program Issues from a Top SEC Enforcement Official

Posted in Broker-Dealer Regulation, Enforcement, Investment Adviser Regulation, SEC Enforcement

As participation in the U.S. Citizen and Immigration Services (USCIS) Immigrant Investor Program or “EB-5 program” grows, regulatory interest is showing a commensurate uptick.  On November 20, 2013, Associate Director Stephen Cohen of the SEC’s Division of Enforcement spoke to a meeting sponsored by the Federal Bar Association about the securities law issues implicated by… Read More

SEC’s Recent Actions Against Two Investment Advisers Raise Important Lessons for All Investment Advisers

Posted in Investment Adviser Regulation, SEC Enforcement

Recently announced cases against two registered investment advisers and certain of their executives serve as timely reminders of where the SEC is focusing its attention. Although the SEC’s actions are based on alleged intentional violations or disregard of certain regulations, they impart important lessons for law-abiding registered investment advisers. Advisers should be aware of the… Read More

Federal Court Finds That Issuer Shares Purchased with Bitcoin Are Securities

Posted in SEC Enforcement

A federal district court has ruled that investors who pay for shares using Bitcoin have effectively invested money, at least for purposes of federal securities laws. The decision has implications for funds that seek to include Bitcoin among their investments or settle purchase orders for fund shares in Bitcoin. The court’s August 6, 2013 decision… Read More

FINRA Issues Sweep Letter Regarding Use of Social Media

Posted in Broker-Dealer Regulation, FINRA Enforcement

FINRA, having enacted new communications rules that specifically reference electronic communications, having issued two Regulatory Notices (linked here and here) providing guidance to the securities industry on social media, and having made social media and electronic communications exam priorities in two of the last three years, is now taking the next logical step: conducting a… Read More

SEC Slaps Fund Directors for Violating Fair Valuation Responsibilities

Posted in Fund Independent Directors, Fund Regulation, SEC Enforcement

Eight former directors of five mutual funds recently settled SEC charges that they failed to satisfy their fair valuation obligations under the 1940 Act. No monetary penalties were assessed, but the former directors agreed to “cease and desist” from future violations (a relatively easy task, since the funds are no longer in operation). The SEC’s… Read More

The SEC Speaks: Reflections and Enforcement Initiatives in 2013

Posted in Enforcement

When the SEC talks, people listen. And securities enforcement professions look forward all year to listening to the Commissioners and the SEC’s senior leadership speak at The SEC Speaks conference. In particular, discussions about the Division of Enforcement’s trends and priorities ranks as one of the most anticipated panels at the conference. This year, uncertainty about the… Read More

SEC Accuses Fund Directors of Breaching Their Valuation Duties

Posted in Enforcement, Fund Independent Directors, Fund Regulation

The SEC has sued the former members of the board of several closed-end and open-end registered investment companies. In short, the SEC alleges that the directors failed to properly fair value a majority of the funds’ holdings during an eight-month period in 2007. The complaint is fact specific and should provide fund boards with some insight… Read More