The Quebec Court of Appeals recently held in an advisory opinion that Canada's attempt to create a national securities regulation scheme with the voluntary participation of the provinces is unconstitutional. Canada's Constitution Act of 1867 grants provinces exclusive authority to regulate securities within their provincial lines. In 2011, the Supreme Court of Canada struck down the Canadian Securities Act, which attempted to establish a central regulation scheme on the basis that the Constitution granted securities regulation power to the provinces.
In an effort to get ...
A unanimous Supreme Court held June 5 that SEC disgorgement is a "penalty" subject to five-year limitations under 28 U.S.C. §2462 and Gabelli v. SEC, 568 U.S. 442 (2013)(5-year limitations applies to civil monetary penalties).
Justice Sotomayor's Opinion started with the premise that a "penalty is a punishment … imposed and enforced by the State," redressing a public wrong for punishment and deterrence, rather than victim compensation. Slip Op. at 5-7. She rejected all three of the SEC's standard arguments.
First, the Court held that deterrence is not a legitimate non-punitive ...
On June 1, new SEC Chair Clayton returned the SEC to the arena in the policy debate surrounding the DOL's Fiduciary Rule. Clayton's public statement responded to a direct invitation for SEC participation by DOL Secretary Acosta in his Wall St. Journal op-ed last week. Acosta used the article to announce there would be no further delay in the DOL Rule, despite continuing study.
In a masterful understatement without apparent irony, the Chair noted: "The SEC has been reviewing this area for some time, including through the RAND study of investor perspectives commissioned in 2006, the ...
Last week Labor Secretary Acosta chose a Wall Street Journal op-ed to announce DOL's decision not to delay the "fiduciary rule" past the once-extended June 9 effective date. See A. Acosta, Deregulators Must Follow the Law, so Regulators Will Too¸ Wall St. J. at A19 (May 23, 2017); our blog, here: blogs/securities-litigation/2017/05/25/dol-wont-delay-fiduciary-rule-past-june-9/
This week, opponents answered, with the lead counsel for the industry's litigation challenge summarizing those arguments on the same op-ed page. See E. Scalia, Godzilla (the Fiduciary Rule) Ate ...
Finally, there's voice of reason entering the policy harangue over the Department of Labor's Fiduciary Rule ... even if it's coming through an unusual outlet. In a May 23 Wall Street Journal opinion piece, new Labor Secretary Acosta announced that DOL won't further delay the implementation of DOL's Fiduciary Rule past June 9.
To recap the bidding:
Tired of foot-dragging by the SEC and Wall Street on adopting an industry-wide fiduciary standard (notwithstanding everyone's agreement in principle), the Obama administration spent over 6 years forging ahead through the Department of ...
On Monday, May 22, the SEC stayed all its administrative proceedings assigned to an ALJ in which a Respondent has an option for review by the 10th Circuit. (Securities laws provide appellate review of SEC administrative proceedings in the Respondent's choice of the Circuit for her State of residence or the D.C. Circuit). The stay will remain in place until Supreme Court action on the agency's expected cert petition in Bandimere or further Commission order.
In Bandimere v. SEC, 844 F. 3d 11689 (10th Cir. 2016), reh'g denied, 2017 WL 1717498 (May 3, 2017)(No. 15-9586), the Tenth Circuit ...
The Department of Labor fiduciary rule was supposed to be implemented on April 10, 2017. That date was pushed back to June 9 so that it could be reassessed, and possibly modified or even repealed. The rule as it stands would require financial advisors to act in the best interests of their clients in retirement accounts. If the rule is repealed, what does that mean for the standard and the industry?
FINRA chairman John Brennan recently explained that even if the DOL fiduciary rule is repealed, "it has elevated and put into plain language the idea of providing investment advice that's better ...
On April 18, the SCOTUS heard oral argument in Kokesh v. Securities and Exchange Commission, an action concerning whether the five year statute of limitations of 28 U.S.C Section 2462 applies to disgorgement. This was the first securities case involving Justice Gorsuch at the SCOTUS level.
The wait will not be long for Gorsuch's second securities case. SCOTUS has agreed to hear Leidos, Inc. v. Indiana Public Retirement System, which will resolve a circuit split over whether Item 303 of SEC Regulation S-K creates a duty to disclose under Section 10(b) of the Securities Exchange Act. The ...
The Department of Labor yesterday adopted a rule delaying the April 10 effective date of its "Fiduciary Rule" for 60 days. The delay gives Labor time to complete the re-study mandated by Trump's February executive order.
DOL could only delay the Rule through a formal rule making process. It did so, even though public comments ran 12:1 against delay. It will need further formal rule making for any other changes.
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 ...
The IRS released guidance this week announcing that it will not apply IRC § 4975 excise taxes (15% on prohibited transactions) and related reporting requirements "with respect to any transaction or agreement to which the DOL's temporary enforcement policy, or other subsequent related enforcement guidance, would apply."
On March 13, DOL issued its Field Assistance Bulletin saying it would forbear enforcement of the Fiduciary Duty Rule if Labor hasn't finished its review by the April 10 effective date. The review (and potential delay in implementation) of the Rule was ordered by an ...