On March 8, 2019, the United States Department of Justice (the DOJ) announced a key revision to its Foreign Corrupt Practices Act (FCPA) Corporate Enforcement Policy (the Policy) regarding employees’ use of ephemeral messaging platforms. The original Policy required companies to prohibit employees’ use of such messaging platforms in order to receive full cooperation credit … Continue Reading
Last week, the U.S. Supreme Court decided Lorenzo v. SEC, determining that a person who knowingly disseminates a misstatement about a security can be primarily liable under the antifraud provisions of the federal securities laws. This significant holding opens the door for the SEC and private plaintiffs to charge misstatement cases as scheme cases, and … Continue Reading
The U.S. Commodity Futures Trading Commission is undergoing a transformation with the new Trump administration while staying on course with its statutory mission of protecting US commodities and derivatives markets. Some of CFTC’s priorities under new Republican Administration will certainly change as articulated by the new Congress, several executive orders from the White House, and … Continue Reading
On December 6, 2016, the U.S. Supreme Court issued its long-awaited ruling in Salman v. United States. In a unanimous opinion, the Supreme Court adhered to its 1983 decision in Dirks v. SEC, 463 U.S. 646, and held that a tippee is liable for trading on inside information when the tipper “personally will benefit directly, … Continue Reading
On October 7, the Consumer Financial Protection Bureau (“CFPB”) proposed a ban on class action waivers in consumer financial products and services contracts. Pending review by a Small Business Review Panel, the ban would potentially take effect in 2018, resulting in increased class action litigation against financial institutions. The proposal does, however, preserve mandatory pre-dispute … Continue Reading
Investment advisers subject to SEC registration would be affected by proposed regulations from the Financial Crimes Enforcement Network. The regulations, proposed in August 2015, would require such investment advisers to create anti-money laundering programs as well as to undertake reporting and recordkeeping responsibilities under the Bank Secrecy Act, including filing suspicious activity reports. For more … Continue Reading
On 2 July 2015, the UK’s financial regulatory, the Financial Conduct Authority (FCA), published its annual report and accounts 2014/15. Overview The annual report highlighted several areas in which the FCA has been active over the past 12 months, including: The use by the FCA of its new consumer credit powers The launch of ‘Project Innovate’ … Continue Reading
A recent Reed Smith Client Alert discusses a June 2015 speech by Stephanie Brooker, Associate Director for Enforcement at the Financial Crimes Enforcement Network (“FinCEN”). Although Ms. Brooker’s comments were specifically directed at the casino and card club industries, she discussed six “core principles” that have and will continue to guide FinCEN’s BSA/AML enforcement activities … Continue Reading
Introduction Stephanie Booker, Associate Director for Enforcement, Financial Crimes Enforcement Network (“FinCEN”) recently gave a speech at the Nevada Bar Association’s Bank Secrecy Act Conference in Las Vegas. Involved in the conference were the State Bar of Nevada’s Gaming Law Section, the American Gaming Association, and the University of Nevada-Las Vegas’ International Gaming Institute. FinCEN … Continue Reading
On June 4, 2015, Consumer Financial Protection Bureau Director Richard Cordray issued a decision in the first appeal of a CFPB administrative proceeding. The appeal to Director Cordray followed the CFPB’s first administrative trial before an administrative law judge. The defendant, a mortgage lender, has vowed to appeal it further to the circuit court. But … Continue Reading
This post was also written by Kiran Somashekara. The Financial Industry Regulatory Authority’s (FINRA’s) National Adjudicatory Council (NAC) released updated Sanction Guidelines on May 12, 2015, for use in adjudicating disciplinary proceedings involving FINRA member firms and associated brokers. The updated Sanction Guidelines provide for tougher sanctions for violations of FINRA rules. FINRA explained that … Continue Reading
Cybersecurity and data breach risk were prominent subjects at the 35th Annual Ray Garrett Corporate and Securities Law Institute held on April 30, 2015 at Northwestern Law School in Chicago. Reed Smith partner Mark Melodia, along with several other panelists, engaged in a lively discussion of effective board oversight of cybersecurity challenges facing their companies … Continue Reading
On Monday, the Consumer Financial Protection Bureau (CFPB) announced the latest in a series of five enforcement actions involving military allotments: a $3.1 million consent order against a payment processor, Military Assistance Company (MAC) and its parent, Fort Knox National Company. The CFPB alleged that MAC had failed to disclose to servicemembers the amount of … Continue Reading
This post was also written by Travis A. Sabalewski. Direct from Richmond, Virginia: yesterday, I (Travis) visited the Greater Richmond Convention Center, where the Consumer Financial Protection Bureau (CFPB) announced at a field hearing a sweeping proposal for new rules regarding payday/deposit advance loans, auto title loans, and certain high-interest, longer-term loans. (A Fact Sheet … Continue Reading
The UK’s Financial Conduct Authority (FCA) has published its Occasional Paper No. 9, setting out the results of the FCA’s research into how well customers understood structured products. The answer, according to the report, is not very well. The report found that, while investors’ expectations of growth in the FTSE were in line with the … Continue Reading
On March 10, Director Richard Cordray of the Consumer Financial Protection Bureau (“Bureau” or “CFPB”) presided over a Field Hearing on Pre-Dispute Arbitration Clauses, discussing what he described as the “key findings” of the Bureau’s long-awaited 700-page Arbitration Report to Congress published earlier that morning. Reed Smith attorney Deepa Zavatsky attended the hearing, where Cordray … Continue Reading
In an Order of Settlement released February 6, 2015, the SEC agreed to stay the administrative action against the Chinese affiliates of the “Big Four” accounting firms for refusing to turn over their audit work papers relating to several U.S.-listed Chinese companies. As we wrote earlier here, the Chinese affiliates of the audit firms had … Continue Reading
More than a year ago, we began following the so-called Ernst & Young (“EY”) State Secrets Case in Hong Kong. On 23 May 2014, the High Court of Hong Kong finally concluded that there was no “reasonable excuse” for EY’s failure to comply with Securities and Futures Commission (“SFC”) notices seeking information and documents, and … Continue Reading
This post was also written by C. Neil Gray. On June 23, 2014, the Supreme Court of the United States issued its much-anticipated decision in Halliburton Co., et al. v. Erica P. John Fund, Inc., No. 13-317 (2014). The Court vacated and remanded the decision of the United States Court of Appeals for the Fifth … Continue Reading
Supreme Court vacates and remands in Halliburton. United States Supreme Court declines to overturn Basic, but decides that defendants can rebut the presumption of reliance – before class certification – by showing a lack of price impact. Watch this space for a full analysis.… Continue Reading
This post was written by Amy. J. Greer and C. Neil Gray. Earlier this week, J. Bradley Bennett, Executive Vice-President, Enforcement for FINRA, spoke at a gathering hosted by SIFMA’s Compliance & Legal Society. Bennett’s remarks purported to bust common myths about the FINRA Enforcement program he leads—myths like FINRA picks on larger firms and … Continue Reading
On May 20, 2014, the Commodities Futures Trading Commission (CFTC) announced an award of $240,000 to an anonymous whistleblower who provided “valuable information” concerning unexplained Commodity Exchange Act violations by an unidentified entity or person. The award was the first issued under the CFTC Whistleblower Program created under the Dodd-Frank Wall Street Reform and Consumer … Continue Reading
The Securities and Exchange Commission recently indicated that it would review, de novo, the January 2014 decision barring the Chinese affiliates of the “Big Four” accounting firms from appearing before the SEC. The Commission’s Order, found here, also granted both parties’ motions to submit additional evidence for consideration – most significantly, the auditors’ evidence that … Continue Reading
For the second time in as many months, the U.S. Securities and Exchange Commission’s Division of Corporation Finance (“Corp Fin”) has issued a Revised Statement on Well-Known Seasoned Issuer Waivers (“WKSIs”). As we mentioned last month, WKSIs are issuers of securities that can get the benefit of registering their securities offerings on shelf registrations that become … Continue Reading
