Securities Compliance Sentinel blog
The highly regulated securities and financial industry has a host of complex problems—and financial institutions often find themselves on the receiving end of audits, investigations and other compliance issues.
In the Securities Compliance Sentinel blog, Ernest shares his knowledge and experience to address cutting edge issues in the firm’s Securities Compliance Sentinel Blog. Join this team of bloggers in their exploration of this increasingly complex area.
Scroll down to see Ernest's most recent blog posts.
Recent Blog Posts
- The SEC Reluctantly Vacates Collateral Bars After Court Loss One of the outstanding issues relating to the Dodd-Frank Act was the SEC’s use of statutory power to regulate conduct that occurred prior to its enactment in July 2010. The United States Court of Appeals for the District of Columbia recently decided that the SEC did not have the power to impose collateral bars on conduct pre-July 2010. Consequently, the SEC has now determined it will allow those respondents and/or defendants, who are subject to these collateral bars, to apply to... More
- If You Want Trouble, Do Not Register as a Broker-Dealer At Fox Rothschild, we are constantly advising clients regarding the peril of engaging in the securities industry without the proper license. In fact, we have developed materials to provide our clients with information about the process. See http://www.foxrothschild.com/content/uploads/2016/10/e-book-Horn-Badway-McCoy-Broker-Dealers-Registered-Investment-Advisers-and-Commodities-Futures-Registered-Entities-October-2016.pdf. A recent case before the SEC has only confirmed this advice. The SEC barred a person from the securities industry, and required disgorgement in the amount of $400,000 because the person failed to register as a broker-dealer while selling private fund interests.... More
- Here Come the States… In the Trump Era, the States May Be the New Top Securities Cops There is an old saying: “the more things change, the more they stay the same.” It seems every few years (usually, the result of a political shift) we see the states become more involved in securities enforcement. Our current time is now subject to this cyclical experience. The SEC and the North American Securities Administrators Association (“NASAA”), the state securities regulators, have signed a memorandum of understanding (“MOU”) to share information so as to assist each other in monitoring compliance over, among other things, the new... More
- Ed Raleigh Publishes Mail and Wire Fraud Article Our colleague Ed Raleigh in our DC office has published an insightful article on Mail and Wire Fraud in the ABA’s Criminal Justice Magazine. We invite you to read it. ... More
- SEC’s Exam Deficiencies The SEC recently released its findings relating to exams of investment advisers. https://www.sec.gov/ocie/Article/risk-alert-5-most-frequent-ia-compliance-topics.pdf. In particular, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) found weak compliance programs; insufficient or late filings; custody rule violations; Code of Ethics problems; and the often used books and records issues. OCIE, in fact, criticized the use of non-particularized, “off-the-shelf” manuals, nearly non-existent annual reviews, and plain and simple failure to implement or follow procedures. Form ADV and Form PF filings also included inaccurate information or were late. Investment advisers were also found... More
- Why is Anyone Surprised with the SEC Examining Firms with Previously Disciplined Advisors? On Monday, September 12, 2016, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced that a “Supervision Initiative” will take place across the country. OCIE staff will conduct focused RIA examinations of firms employing or contracting with supervised persons, who have a disciplinary history. OCIE plans to evaluate the effectiveness of RIA compliance programs, supervisory oversight practices, and disclosures to clients and prospective clients, concentrating on the potential risk disclosures arising from financial arrangements initiated by supervised persons with a disciplinary history. OCIE’s justification for this targeted examination... More
- Fox Rothschild’s National Survey on Restrictive Covenants Released Although the Broker Protocol has alleviated some concerns, many firms still find themselves wrestling with the vagaries of restrictive covenants when dealing with their employees. Fox Rothschild has produced this revised and updated 50-state survey as a quick reference for in-house counsel and human resource professionals to access details on the variations by state in the laws of restrictive covenants in the employment context. As always, we are available to discuss individual circumstances.... More
- The More Things Change, The More They Stay The Same…. Given the start of the NFL season and the post-Labor Day last leg of the presidential campaign season, it reminded me of a blog entry that I posted in August 2012, regarding picking a winner for the then presidential race based upon the conference of the team that won the Super Bowl in the year of the election. I have re-published the blog below for your amusement. I blogged on this topic because it involved 3 things everyone in the securities... More
- Huge Customer Protection Rule Fine Brings Back Memories My friend and a legend in the securities regulatory field, Edwin Nordlinger, who served as Deputy Regional Director in the SEC’s New York office for years, was one of the nation’s premier experts on the SEC’s net capital and customer protection rules. He taught hundreds of SEC staff members and others about these rules over the years. However, when Ed would begin one of these lectures, he would always introduce himself by saying: “Hello, I am Ed Nordlinger from New... More
- Enforcement Settlements All Wrapped Up in a Bow Last year, the SEC’s Division of Enforcement launched the “Municipalities Continuing Disclosure Initiative” offering “favorable settlement terms” to municipal issuers and underwriters who self-report continuing disclosure violations. At that time, it was claimed that there were a lot of problems and that it was expected there would be more such settlements in the future. See http://www.sec.gov/divisions/enforce/municipalities-continuing-disclosure-cooperation-initiative.shtml. Despite the fanfare, the SEC has used pre-packaged settlements in the past, and will most likely continue to do so. Thus, not really, a year... More