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Category Archives: SEC

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“The Opinions Offered Today Are Mine Alone And Do Not Represent The Commission” — A Summary Of Recent Remarks From SEC And CFTC Officials

Posted in CFTC, SEC
Selflessly, Blaine Doyle recently attended a presentation here in Chicago by the SEC and CFTC, so you didn’t have to do it yourself.  Here is his recount of the highlights. – Alan Anyone who has sat through a talk by financial regulators is undoubtedly familiar with the refrain from the individuals that they do not… Continue Reading

The SEC Released A Risk Alert On Reg S-P, a/k/a How To Avoid A $1 Million Penalty

Posted in Examination, Privacy, Reg S-P, SEC
I am hardly saying that SEC Regulation S-P is the sexiest of regulations. I mean, has any customer is history actually read one of those exciting statement stuffers that discloses in some dense font a BD’s privacy policy? Likely not, but, nevertheless, it remains that in this day and age, with hacking and phishing and… Continue Reading

Hope Springs Eternal

Posted in Administrative Proceedings, NCLA, SEC
My partner, Ken Berg, writes about his recent meeting with the NCLA, a group that anyone who has an administrative practice should be familiar with.  –  Alan I had the privilege of being invited to attend in Washington, D.C., on February 28, 2019, the inaugural panel discussion hosted by a relatively new nonprofit civil rights… Continue Reading

Ameriprise Learns The Hard Lesson That To Be Deemed “Reasonable,” A Supervisory System Actually Has To Work

Posted in SEC, Supervision
A little over a year ago, I blogged about a FINRA Enforcement action against an Ameriprise rep – but, notably, not Ameriprise – to highlight what a great job the firm did in ensuring that its sales force was not engaging in any undisclosed outside business activities.  It had a robust supervisory procedure, with multiple… Continue Reading

Has The SEC Taken All The Mystery Out Of Filing SARs?

Posted in AML, SAR, SEC
This week, Charles Schwab consented to pay the SEC a $2.8 million civil penalty for failing to file SARs on certain transactions – suspicious transactions, namely – by a number of independent investment advisors that Schwab had terminated from its platform. This matter is noteworthy not just for the size of the civil penalty, but because… Continue Reading

Beyond Lucia: The Supreme Court’s Decision Is Just the Beginning

Posted in Administrative Proceedings, appeal, Defenses, SEC
Here is an important post by my partner, Ken Berg, regarding SEC administrative proceedings, and what we can expect following the Supreme Court’s recent decision in Lucia. – Alan By now everyone knows the US Supreme Court declared the SEC’s administrative proceedings unconstitutional because the ALJs were improperly hired by the SEC staff instead of… Continue Reading

On To SCOTUS!

Posted in Administrative Proceedings, SEC
On January 12, 2018, the U.S. Supreme Court agreed to review the constitutionality of the SEC’s appointment of its in-house administrative law judges (“ALJs” for short). As we’ve discussed previously on the blog, a trip to SCOTUS seemed inevitable after the 10th Circuit handed down its decision in Bandimere, concluding that the SEC ALJs were… Continue Reading

SEC Decrees That Its ALJs Are Constitutional. Now What?

Posted in Disciplinary Process, SEC
After spending the last few years ferociously denying that there was any constitutional issue with the manner in which SEC Administrative Law Judges (ALJs) were appointed to their position, this morning, the SEC announced that it had “ratified” the prior appointment of each of its ALJs – Murray, Foelak, Elliot, Grimes and Patil.   You can read the… Continue Reading

Dawn Bennett Redefines “Spirited Defense” In Her SEC Case

Posted in Administrative Proceedings, Defenses, Disciplinary Process, SEC
This one belongs in the “truth is stranger than fiction” category. By now, you are probably familiar with the exploits of Dawn Bennett, former hostess of her radio show, “Financial Myth Busting.” She was the one who the SEC permanently barred last year after she elected not to appear at her administrative hearing (after her… Continue Reading

Ransomware In 2017: Not A Pretty Picture

Posted in Cybersecurity, FINRA, SEC
I am happy to share this post from my colleague, Greg Stein, about ransomware.  While ransomware is not something unique to the financial services industry, because, as criminal Willie Sutton famously answered when asked why he robbed banks, our industry is “where the money is,” BDs, IAs and banks do seem to attract more than their fair… Continue Reading

When It Comes To Testifying To The SEC, Providing Alternative Facts Can Be A Bad Idea

Posted in Disciplinary Process, Enforcement, Examination, FINRA, SEC
At the beginning of most FINRA OTRs, the examiner reads from a script of sorts, outlining some of the basic rules governing the proceeding. One of the things the script calls for is an express acknowledgement by the witness that he or she is testifying pursuant to Rule 8210, and that, as a result, a… Continue Reading

SEC Gives Advisors A Break On Custody Rule

Posted in custody rule, SEC
A common complaint that I hear from broker-dealers and investment advisors is that it is nearly impossible anymore to obtain informal guidance from their regulators. Where it was once possible, even normal, to make a call and get casual advice how to comply with a particularly tricky rule, nowadays, regulators routinely decline to respond to… Continue Reading

SEC ALJs, Part 3: Separation Of Power/Removal Defense Rides On Coattails Of Reinvigorated Appointments Clause Defense

Posted in Administrative Proceedings, Defenses, Disciplinary Process, SEC
In my second post on constitutionally-based affirmative defenses to SEC administrative proceedings, I discussed the shift of momentum in favor of the defense that the process of hiring SEC ALJs violates the Appointments Clause of the U.S. Constitution. This post examines the defense that the process of removing SEC ALJs violates the separation of power… Continue Reading

Article II Appointments Clause Defense To SEC Administrative Actions Gains Momentum In The Courts

Posted in Administrative Proceedings, appeal, Dodd Frank, SEC
Here is Part II of Ken Berg’s analysis of constitutional defenses that have been raised in response to the SEC’s increased use of administrative proceedings.  In the interest of full disclosure, note that the Malouf case referenced towards the end is one that Heidi VonderHeide and I are handling.  In addition, it also worth mentioning… Continue Reading

No Surprise Here: Courts Take Constitutional Complaints About SEC Administrative Prosecutions More Seriously Than The SEC

Posted in Administrative Proceedings, Defenses, SEC
This is the first in a series of posts by my partner, Ken Berg, discussing the constitutional defenses to SEC administrative enforcement actions, which we are called upon regularly to defend. Each subsequent post will discuss one of the constitutional issues and report the current state of the law as to that defense.  Ken’s next… Continue Reading

Tell Me Something I Don’t Know: OCIE’s Tips To Surviving An SEC IA Exam

Posted in Examination, RIA, SEC
Let’s chalk this one up to “great minds think alike,” or maybe just “minds think alike.” You may recall that in his recent letter to member firms that accompanied FINRA’s 2017 Exam Priorities Letter, FINRA CEO Robert Cook said, “starting this year, we will publish a summary report that outlines key findings from examinations in… Continue Reading

2017 Off To A Bad Start For The SEC As The 10th Circuit Finds SEC ALJs To Be Unconstitutional

Posted in Administrative Proceedings, Disciplinary Process, Enforcement, SEC
Many industry authors – including me[1] – have devoted a lot of attention lately to the SEC’s increased use of Administrative Proceedings (rather than Federal court cases) in recent years, and questioned the fairness of such proceedings, given their relative lack of discovery tools, the short timeframe provided within which to prepare a case for… Continue Reading

Looking For A Silver Lining: Post-Election Thoughts On The SEC

Posted in Administrative Proceedings, appeal, Disciplinary Process, Enforcement, SEC
Wednesday morning marked the confluence of two events. First, like the rest of the world, I awoke to the reality of the results of the presidential race.  Then, as soon as I got to the office, I received the results of a case (on which I have previously blogged) that the SEC’s Division of Enforcement… Continue Reading
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