FINRA’s National Adjudicatory Counsel (“NAC”), recently, affirmed a disciplinary panel decision significantly sanctioning a broker-dealer for paying unregistered persons and entities. See https://www.finra.org/sites/default/files/2020-07/NAC_2014042606902_Silver-Leaf_062920.pdf.
FINRA alleged, among other things, that a broker-dealer paid transaction-based compensation to “unregistered finders,” and non-registered entities owned by its registered persons. Ultimately, the NAC agreed that, over a 3 year period, the broker-dealer paid and/or shared certain transaction-based compensation with unregistered finders and entities affiliated with registered persons, rather than…
The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) conducted a series of examinations into private fund advisers. See the SEC risk alert here. To say the least, OCIE was not pleased with the results, indicating a significant percentage of these advisers had compliance issues. In particular, OCIE found problems with: (1) conflicts of interest; (2) fees and expenses; and (3) material non-public information policies and procedures.
OCIE found that these private advisers had…
The SEC’s Office of Compliance and Inspections (“OCIE”), recently, issued an alert—more like a shot across the bow—to BDs and RIAs regarding its concerns over activities in the industry concerning the challenges encountered by COVID-19. See https://www.sec.gov/files/Risk%20Alert%20-%20COVID-19%20Compliance.pdf. As part of its efforts, OCIE made certain recommendations concerning: (1) investor asset protection; (2) personnel supervision; (3) fees, expenses, and financial transactions policies; (4) investment fraud; (5) business continuity plans; and (6) sensitive information protection.
OCIE complained…
Alerts By Jesse Fishman and Ankita Patel
Delaware adopted new amendments to its General Corporation Law (DGCL) on July 16, 2020. Amendments to sections 102, 110, 116, 145, 212, 228, 232, 251, 363, 365 and 367 appear to respond to the COVID-19 pandemic, while others modify proxy information exchange, emergency provisions for businesses and the rules regarding public benefit corporations.
We detail these amendments below.
Section 102 – Company Naming and Director Liability
Section 102(a)…
Recently, the United States District Court of the District of Columbia refused to dismiss money laundering charges against a defendant who was allegedly engaged in a darknet cryptocurrency scheme. See U.S. v. Harmon, Case Number 1:19-cr-00395-BAH (D.D.C. July 24, 2020) .
Essentially, the defendant tried to claim that, when he transferred more than 350,000 bitcoins, he was not transferring “money,” and, therefore, not subject to operating an unlicensed money transmitting business, in violation of 18 U.S.C. §…
Fox Rothschild’s Securities Industry Group and Labor & Employment Department have updated the firm’s National Survey on Restrictive Covenants, a quick reference guide for in-house counsel and human resource professionals in a variety of industries.
Restrictive covenant law is in a constant state of flux and varies considerably from state to state. Our national survey helps companies keep up with the latest changes to state laws, including increased requirements for creating enforceable restrictive covenants.…
In an unexpected to say the least case of first impression, the United States Court of Appeals for the Fifth Circuit, essentially, blew away the privacy doors of the cryptocurrency world when it forced a Bitcoin exchange to disclose user data to the federal government without being served a warrant. See USA v. Gratkowski, Case number 19-50492, (5th Cir. 2020). This Bitcoin exchange use blockchain technology that records every transaction in a publicly accessible ledger,…
The United States Department of Labor (“DOL”) has had a very active summer regulating the securities industry. Yes, you heard it right, the DOL has made certain pronouncements that have considerable effect on the securities industry.
Initially, the DOL allowed 401(k) plans to invest in private equity funds so long as they are managed by an investment professional. The DOL allowed specific types of private equity investments provided the investment professional satisfied its fiduciary obligations.…
By Jesse Fishman and Laura Holm
In Quarterly Reports on Form 10-Q, companies are required to disclose any material changes to risk factors that were included in their most recent Annual Report on Form 10-K. Many companies do not update risk factors in their first quarter 10-Q filing because no material changes have occurred since the filing of the Form 10-K. However, the world changed drastically in the first and second quarters of 2020 and…
Join our colleagues, Jon Heyl and Alex Kerzhner, in what is sure to be an important review of the challenges facing the PE/HF industry during the pandemic. The webinar will take place on Thursday, June 4, 2020 at 2 p.m. (EDT)/ 11 a.m. (PDT).
Please register (or click) at this site: https://foxrothschild2.webex.com/mw3300/mywebex/default.do?nomenu=true&siteurl=foxrothschild2&service=6&rnd=0.520498216233004&main_url=https%3A%2F%2Ffoxrothschild2.webex.com%2Fec3300%2Feventcenter%2Fevent%2FeventAction.do%3FtheAction%3Ddetail%26%26%26EMK%3D4832534b00000004a042107c2af537d531b2ac872f843c41108c4da97db0231303c011bd8277765f%26siteurl%3Dfoxrothschild2%26confViewID%3D161131266161257810%26encryptTicket%3DSDJTSwAAAASqE0ZuyzNd7jcvQfkqx3mqfGmPjA6SK9Z5v54tVs7LwQ2%26
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