Broker- Dealer Law Corner

Broker- Dealer Law Corner

Tag Archives: appeal

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

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

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

Advertising Case Loss Reveals Limits To FINRA’s Jurisdiction Over Outside Business Activities

Posted in Advertising, Disciplinary Process, Enforcement, FINRA, Rule 2210, Sanctions
It is a simple fact that a broker-dealer has no obligation to supervise a disclosed outside business activity. How do I know?  FINRA has said so.  This, for instance, comes straight from Reg Notice 05-50:  “Rule 3030 does not require that the firm supervise or even approve an outside business activity, although a firm may… Continue Reading

Updates: Two Losers + One Positive Note = A Bad Week For Broker-Dealers

Posted in Administrative Proceedings, appeal, Disciplinary Process, Enforcement, FINRA, Research analyst, Rule 2242, Rule 2711, SEC
There have been some developments this week in a few matters on which I have previously offered my views. To help you stay on the cutting edge of financial world current events as you mingle at your upcoming Cinco de Mayo fiestas, here are three updates.  Two, not surprisingly, represent wins for the regulators.  The… Continue Reading

Nobody’s Perfect (And Even FINRA Finally Acknowledged It)

Posted in Compliance, Disciplinary Process, Enforcement, FINRA, Statutory Disqualification
Fans of this blog (or, at least, readers of this blog who are fans of Jeopardy) will no doubt remember Alan’s prior post, published a few weeks ago, and discussing a recent case that FINRA’s Department of Enforcement brought against one of our clients. From the very beginning, we, as her counsel, were both bewildered… Continue Reading

The SEC’s Proposal To Improve The Fairness Of Administrative Proceedings: Not Nearly Enough To Impact Its Winning Percentage, But Enough To Make It Seem It Cares

Posted in Administrative Proceedings, appeal, SEC
In what many will likely consider to be an effort to quiet the increasing chorus of criticism over the SEC’s increased use of administrative proceedings over the last few years, today, the SEC announced a proposal to amend several of the rules governing those proceedings. While the SEC did not expressly acknowledge that the amendments… Continue Reading

Double Jeopardy: I’ll Take “Fundamental Unfairness” for $200, Alex

Posted in Disciplinary Process, Enforcement, FINRA, MC-400
I have written before about some of FINRA’s procedural processes that seem strange and unfair. For instance, the constitutionally guaranteed Fifth Amendment right against self-incrimination? Doesn’t exist in FINRA world. Try invoking the Fifth at a FINRA OTR rather than answering a question and you will be facing a permanent bar for violating Rule 8210.… Continue Reading

Compliance Officer Liability: Findings Without Sanctions? The Plot Thickens

Posted in Administrative Proceedings, appeal, Compliance, Enforcement, RIA, Sanctions, SEC, Supervision
We have previously posted on the issue of CCO liability, a very sensitive subject, to say the least, for many readers of this blog.  If this is a subject that interests you, then there was a very intriguing development this past week in this area that merits your attention. It came in the form of… Continue Reading

David Slays Goliath…And Goliath Is Pissed

Posted in Administrative Proceedings, appeal, Disciplinary Process, Enforcement, Sanctions, SEC
I reported a few weeks ago on the victory that my clients, Mark Robare and Jack Jones, achieved in the administrative proceeding that the SEC initiated against them last year. Against all odds, they convinced Judge Grimes that not only had they not committed the fraud claimed by the SEC, but, in Judge Grimes’ words,… Continue Reading

Illinois Appellate Court Victory in a FIRREA Case of “First Impression”

Posted in AAA, Banks, FIRREA
The Illinois Appellate Court issued an opinion this week with important repercussions for financial institutions who step in and take over the assets of failed institutions. In a case of “first impression in Illinois,” the Illinois Appellate Court held that Illinois courts lacked jurisdiction to consider a motion to vacate an arbitration award where the… Continue Reading
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