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David Picon

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David A. Picon is a seasoned litigator who has tried dozens of cases in various tribunals for financial services firms and public and private companies. David represents clients in complex commercial disputes in a wide range of matters, including complex securities issues, commodities and derivatives-related disputes, fraudulent transfer actions, alleged Ponzi schemes, and contract and employment-related disputes.

A member of the Commercial Litigation and Securities Litigation practices, David appears in numerous judicial and administrative forums in investigations brought by the SEC, FINRA and other regulatory bodies for financial services firms. He also has broad experience in large chapter 11 cases, representing debtors, as well as creditors and statutory committees. Additionally, David has substantial counseling experience in general commercial disputes.

David is a frequent speaker on matters related to the financial services industry and the co-author of “Broker-Dealer Litigation and Arbitration,” Chapter 86 of the multi-volume treatise, Commercial Litigation in New York State Courts.

David also serves on the boards of The Harlem School of the Arts and JVS of Metrowest.

David is the chair of the Firm’s Billing and Collections Committee, and a member of the Firm’s Hiring Committee and Pro Bono Committee.

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On January 13, 2015, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced its 2015 examination priorities for investment advisers, broker-dealers and transfer agents.  These priorities emphasize the importance of transparency and seek to identify, through enhancements in technology, potential illegal activity by focusing on the following key areas.

Protecting Retail Investors and Investors Saving for Retirement

OCIE noted that retail investors are more dependent than ever on their own investments for retirement and are increasingly facing new and complex options for investing.  Products and services formerly identified as alternative or institutional like private funds, illiquid investments and structural products are increasingly being developed for retail investors.  As a result, in 2015 OCIE plans several initiatives to assess the risks of these trends to retail investors, which emphasize transparency and suitability concerns.  These include targeting (a) the adequacy of fee arrangements by investment advisers; (b) firms’ sales practices when making investment recommendations; (c) the suitability of recommendations; and (d) the supervision of registered representatives and financial advisors in branch offices.

Recently, the SEC approved FINRA’s proposed new Rule 3110(e) relating to background investigations of registered persons.  FINRA Rule 3110(e), which replaces NASD Rule 3010(e) and goes into effect on July 1, 2015, streamlines and clarifies the rule language by providing that “each member shall ascertain by investigation the good character, business reputation, qualifications and experience of an applicant before the member applies to register that applicant with FINRA and before making a representation to that effect on the application for registration.”  The rule further clarifies that a firm is required to review a copy of an applicant’s most recent Form U5, if available.  Most importantly, the rule requires that firms adopt “written procedures that are reasonably designed to verify the accuracy and completeness of the information contained in an applicant’s Form U4 no later than 30 calendar days after the form is filed with FINRA.”

In the recent decision, Goldman Sachs & Co. v. Golden Empire Sch. Fin. Auth., 764 F.3d 210 (2d Cir. 2014), the Second Circuit held that nearly-identical forum selection clauses in broker-dealer agreements between the broker-dealers/underwriters of auction rate securities (“ARS”) and the public financing authorities who issued the ARS superseded the Financial Industry Regulatory Authority, Inc. (“FINRA”) rule mandating arbitration between a customer and member.  In so holding, the Second Circuit potentially has opened an avenue for firms seeking to litigate – rather than arbitrate – customer disputes subject to FINRA’s mandatory arbitration rule.