In a strongly-worded public statement last week, SEC Commissioner Gallagher chided the Commission for "cutting off the noses of CCO's to spite its face." Explaining his dissent in two recent enforcement actions imposing sanctions on investment-advisor Chief Compliance Officers, the Gallagher accused the Commission and its Enforcement staff of wrongly blurring the lines between the CCO's (staff) function of administering compliance programs and the business-line obligation to implement them (through supervision). Gallagher is "especially worried" about creating ...
The Financial Industry Regulatory Authority ("FINRA") recently filed a proposed rule change with the Securities and Exchange Commission ("SEC") to amend Rules 12214 and 12601 of the Code of Arbitration for Customer Disputes ("Customer Code") and Rules 13214 and 13601 of the Code of Arbitration Procedure for Industry Disputes ("Industry Code") (collectively, "Codes") to require that parties to an arbitration to provide more advance notice before cancelling or postponing a hearing or pay a higher cancellation fee if advance notice is not provided. These changes are ...
The Securities Exchange Commission announced June 18 the first major wave of underwriter sanctions under its Municipalities Continuing Disclosure Cooperation ("MCDC") Initiative. The SEC sanctioned 36 municipal underwriting firms a total of about $9 million. The SEC's Enforcement Division announced the MCDC Initiative in March 2014 as part of the Commission's increased focus on municipal markets. The Initiative aims to improve compliance with regulations requiring municipal-issuers to periodically update their financial disclosures - and did so by asking issuers and ...
In a ruling that may signal the end to much of the litigation over mortgage-backed securities, New York's highest court held limitations for breach of warranty litigation over portfolio loans run from the MLSA closing date and not from breach of the contractual repurchase obligation. Many investors have argued that a sponsor's obligation to repurchase non-conforming loans constitutes a separate "springing" obligation 150 days after notice of a non-conforming loan (60 for cure, then 90 for repurchase). The Court rejected that notion, in favor of its long-standing preference ...
Last week, SEC Administrative Law Judge Grimes dismissed administrative charges against an investment adviser and its principals for allegedly failing to disclose material conflicts of interest in its Form ADV and willfully filing false ADVs. The SEC instituted administrative proceedings against an investment advisor and several of its personnel, asserting that the firm's form ADV Part 2 did not adequately disclosure material conflicts of interest arising from Fidelity's revenue-sharing program in connection with some among the many funds on its platform, and also for ...
On June 5, the Tennessee Supreme Court rejected a per se rule of unconscionability for non-mutual arbitration clauses, holding them enforceable if not too-one-sided and commercially reasonable under the circumstances. Berent sued his mobile-home sellers in chancery court, arguing that foreclosure exceptions for the seller within a generally broad-form arbitration clause rendered it unconscionable and unenforceable. The trial and intermediate appellate courts agreed, under the Supreme Court's prior decision Taylor v. Butler, 142 S.W.2d 277 (TN 2004). The Sellers sought ...
For over a year, critics have questioned the fundamental fairness of the SEC's administrative forum, including whether the Agency should act as prosecutor, judge and jury. Even as criticisms mount, the Commission Staff steadfastly declaims there's no issue here - and if there is, they should be the ones to decide it (through two layers of administrative proceeding, with judicial Chevron deference to their expertise, if ever judicially reviewed). Commissioner Piwowar and former SEC Staff have suggested that more transparency might be in order; but the Staff's response included ...
The Department of Labor ("DOL") released a controversial proposed rule on April 20, 2015, that seeks to expand fiduciary duties in the context of retirement-investment advice. Specifically, the proposed rule would rework a 1975 five-part test that greatly limits the fiduciary responsibilities of advisors for plans covered under the Employment Retirement Income Security Act ("ERISA"). The new fiduciary-duties standard proffered by the rule would require advisors to put the best interests of the client ahead of any profit motive, especially the incentives inherent to certain ...
We use cookies to improve your website experience, provide additional security, and remember you when you return to the website. This website does not respond to "Do Not Track" signals. By clicking "Accept," you agree to our use of cookies. To learn more about how we use cookies, please see ourPrivacy Policy.
Necessary Cookies
Necessary cookies enable core functionality such as security, network management, and accessibility. These cookies may only be disabled by changing your browser settings, but this may affect how the website functions.
Analytical Cookies
Analytical cookies help us improve our website by collecting and reporting information on its usage. We access and process information from these cookies at an aggregate level.
