On March 27, securities regulator FINRA extended its previous postponement of in-person hearings from May 1 through May 31. FINRA also will offer virtual hearing options (including Zoom) by agreement or panel order. Finally, postponement fees are waived through September with at least 20-days' notice. All other case deadlines remain unaffected.
Thomas K. Potter, III (tpotter@burr.com) is a partner in the Securities Litigation Practice Group at Burr & Forman, LLP. Tom is licensed in Tennessee, Texas, and Louisiana. He has over 34 years of experience representing financial ...
SEC Enforcement Co-Directors Stephanie Avakian and Steven Peiken issued a March 23 public statement warning that the novel Coronavirus pandemic increases material non-public information and reminding corporate insiders of their obligation to disclose or abstain.
“Corporate insiders are regularly learning new material nonpublic information that may hold an even greater value than under normal circumstances. This may particularly be the case if earnings reports or required SEC disclosure filings are delayed due to COVID-19. Given these unique circumstances, a greater ...
The U.S. Department of Justice (“DOJ”) has filed its first criminal action against fraudulent activity taking advantage of the novel coronavirus pandemic.
DOJ filed suit on March 21 in Austin, Texas accusing the operators of “coronavirusmedicalkit.com” of wire fraud under 18 U.S.C. § 1343 by purporting to sell WHO-approved COVID-19 vaccines online in return for credit-card payments of $4.95 for shipping. But there are no approved vaccines yet, and WHO is not involved with the website.
The United States District Court for the Western District of Texas entered temporary ...
The New York Stock Exchange announced today that it will activate its Business Continuity Plan, temporarily closing its equities and options (Amer and Arca) trading floors, and will move to all-electronic trading starting at the open on Monday, March 23. Some Floor Broker order types will not be available.
The announcement is here.
The SEC has gathered its guidance in a single location. Topics covered include:
(a) The SEC’s own Business Continuity Plan (“BCP”) and its implementation;
(b) Increased market monitoring and surveillance;
(c) Issuer guidance regarding COVID-related disclosures;
(d) Conditional exemptive orders for registrants, including investment companies and investment advisers, easing meeting and certain reporting requirements;
(e) Delaying certain open rulemaking proposals until April 24.
The Enforcement Division remains active, having implemented temporary trading ...
The Massachusetts Securities Division adopted a watered-down fiduciary-rule for broker-dealers, effective March 6, with a compliance deadline of September 1, 2020. The move comes after years of announced intention to do so – especially after the Obama Labor Department’s fiduciary-rule got shot down in the courts.
The Rule requires a broker-dealer to act as a fiduciary for retail customers (excluding institutional accounts and investment advisers) when a broker:
• Has discretion (other than time and price);
• Has undertaken a contractual fiduciary duty; or
• Has ...
Paxos Settlement Service announced February 20, 2020 that it has commenced P2P settlement of US listed equity trades over a private, permissioned blockchain with Credit Suisse and Instinet (a Nomura Bank subsidiary). Paxos expects Societe Generale will join soon.
Paxos is registered with the New York Department of Financial Services and regulated as a limited-purpose trust company.
Late last year, Paxos obtained SEC No-Action relief from clearing-agency registration, limited to a “Feasibility Study No-Action Phase” restricted to a maximum of seven participants for 24 ...
This week FINRA issued Reg. Notice 20-08 on “Pandemic-Related Business Continuity Planning, Guidance and Regulatory Relief.”
FINRA urges member firms to review and update their Business Continuity Plans (“BCP”) to ensure they fit the effect of an infectious disease pandemic on each firm’s operations and risk profile. See Rule 4370 (annual BCP review requires an update on any material change).
FINRA anticipates that firms may need to implement remote work arrangements (whether telecommuting or working from firm alternate or recovery sites). In those instances ...
Former Louisiana deputy sheriff and Russian resident Steven Seagal agreed to a Cease and Desist (“C&D”) Order by the SEC, finding violations of the non-touting provisions of Securities Act § 17(b) and imposing civil penalties for acting as a Twitter and Facebook “brand ambassador” for cryptocurrency Bitcoiin2Gen without disclosing it was a paid endorsement.
The Order required Seagal to forego such opportunities for any issuer for three years, disgorge his endorsement fees and pay a civil penalty of a like amount over the coming year.
In 2017, the SEC’s Office of ...