Important developments in U.S. securities law, white collar criminal defense, regulatory enforcement and other emerging issues impacting financial services institutions, publicly traded companies and private investment funds
On August 25, 2022, the Securities and Exchange Commission, in a 3-2 vote, adopted a new disclosure rule implementing the Dodd-Frank Act’s requirement that public companies disclose the relationship between compensation paid to executives and the company’s financial performance. SEC Chair Gary Gensler’s stated purpose of the new rule, commonly known as the “pay versus … Continue Reading
In an era where TikTok stars outearn scores of CEOs of top earning publicly traded companies, executive compensation is no less important to the investing public or to companies striving to attract and retain top talent. Indeed, just this year the CEO of Starbucks received a 39% pay increase. Such soaring executive compensation has not … Continue Reading
The U.S. Court of Appeals for the First Circuit held yesterday that the U.S. securities laws apply to foreign brokers’ solicitations of securities purchases by foreign investors if the purchasers or sellers incurred irrevocable liability within the United States to pay for or deliver the securities. The decision in SEC v. Morrone follows the “irrevocable … Continue Reading
The Court of Appeals for the Tenth Circuit held today that the Securities and Exchange Commission may bring an enforcement action based on allegedly foreign securities transactions involving non-U.S. residents if sufficient conduct occurred in the United States.… Continue Reading
On February 5, 2018, U.S. District Court for the Southern District of New York granted Defendant Khan Funds Management America, Inc.’s Rule 12(b)(6) motion to dismiss a whistleblower retaliation claim under Dodd-Frank on the grounds that Plaintiff failed to state a claim upon which relief could be granted. Read the full post on Proskauer’s Whistleblower Defense blog.… Continue Reading
The SEC has continued to pursue a number of insider trading cases this year, both large-scale and small. Some of those matters involved trades that yielded relatively small amounts of profits: $40,000-$60,000. Why does the enforcement division spend resources on these smaller cases? First, they serve as a reminder that violations can be identified, even … Continue Reading
A federal court in Utah recently held that the Securities and Exchange Commission may bring an enforcement action based on allegedly foreign securities transactions involving non-U.S. residents if sufficient conduct occurred in the United States.… Continue Reading
Yesterday the SEC announced its first enforcement proceeding for breach of the fiduciary duty for municipal advisors created by the 2010 Dodd-Frank Act.… Continue Reading
In 2015, we saw high-profile whistleblower litigation around the country under a variety of statutes (such as SOX and Dodd-Frank) that yielded decisions expanding the scope of protected activity and even limiting defenses to causation. We also saw significant activity from the U.S. Securities and Exchange Commission’s Office of the Whistleblower that caused employers to revisit … Continue Reading
Potentially abusive trading algorithms, such as algorithms that purportedly engage in “spoofing” or “layering” are the subject of considerable regulatory interest. However, in an interesting complaint filed on October 19, 2015, the CFTC alleged that a firm manually entering futures orders engaged in illegal spoofing that appears to have lured algorithmic traders into the market. … Continue Reading
By Harry Frischer, Lindsey Olson and Rachel Wolkinson on Posted in Securities Law
Following the D.C. Circuit’s July 14, 2015 decision in Koch et al. v. Securities and Exchange Commission, No. 14-1134 (D.C. Cir. July 14, 2015), which held that the SEC could not retroactively punish an investment advisor for conduct that occurred prior to the enactment of the statute authorizing the punishment, the SEC announced last week … Continue Reading
The Securities and Exchange Commission appears to be hearing the music. In response to the many voices that have expressed dissatisfaction with the procedures used in SEC administrative hearings, the SEC today issued proposed amendments to the rules governing those hearings. Those proposals are now subject to public notice and comment.… Continue Reading
The Securities and Exchange Commission again rejected constitutional challenges to the use of administrative enforcement proceedings presided over by Administrative Law Judges (“ALJs”). The Commission’s September 17, 2015 decision in In the Matter of Timbervest, LLC – the Commission’s second ruling on the constitutional issue in the past two weeks – rebuffed arguments that ALJ … Continue Reading
Today, the Second Circuit issued its highly anticipated decision in Berman v. Neo@Ogilvy, ruling (in a 2-1 decision) that Dodd-Frank’s whistleblower protection provision applies to internal complaints (i.e., complaints that are made by employees within the company and not to the SEC). This creates a circuit split; it is directly at odds with the Fifth Circuit’s … Continue Reading
The Securities and Exchange Commission joined the raging debate about whether SEC administrative proceedings conducted by administrative law judges (“ALJs”) are unconstitutional if the ALJs have not been appointed in accordance with the Appointments Clause of the U.S. Constitution. In a 3-2 decision in In the Matter of Raymond J. Lucia Companies, Inc., the Commission … Continue Reading
We blogged last week about a New York federal court’s decision in Duka v. SEC conditionally sustaining a facial challenge to an administrative enforcement proceeding conducted by Administrative Law Judges (“ALJs”) of the Securities and Exchange Commission. In that case, Judge Richard M. Berman, of the Southern District of New York, held that SEC ALJs … Continue Reading
The broad definition of a “swap” in the Dodd-Frank Act, read literally, would encompass many transactions that Congress never intended to cover, so the SEC and the CFTC have jointly promulgated regulations that provide that many of those transactions are not treated as swaps. However, a recent SEC Investor Alert, stating that fantasy stock trading … Continue Reading
A federal District Judge in the Southern District of New York appears to have conditionally sustained a facial challenge to an administrative enforcement proceeding conducted by Administrative Law Judges (“ALJs”) of the Securities and Exchange Commission. In an August 3, 2015 decision in Duka v. SEC, 1:15-cv-00357, Judge Richard M. Berman held that he had subject-matter … Continue Reading
On May 1, 2015, Richard Ketchum, Chairman and CEO of the Financial Industry Regulatory Authority (“FINRA”), reaffirmed his support for a uniform fiduciary standard for broker-dealers. Testifying before the House Financial Services Committee, Chairman Ketchum emphasized that the U.S. Securities and Exchange Commission (the “SEC”) – and not the U.S. Department of Labor (the “DOL”) … Continue Reading
May defendants charged in SEC administrative proceedings challenge the constitutionality of those proceedings in federal district court? The determination of whether district courts have subject matter jurisdiction over such challenges has become the critical prelude in the ongoing controversy over the SEC’s seemingly arbitrary use of its “home court” alternative to pursue claims and remedies … Continue Reading
The Second Circuit Court of Appeals recently deferred to the SEC’s determination that a tipster who provided information to the Commission before July 21, 2010, the effective date of the Dodd-Frank Act, is not eligible to receive a whistleblower bounty payment. Stryker v. SEC, Case No. 13-4404-ag (2d Cir. Mar. 11, 2015).… Continue Reading
By Scott Fishwick and Tanya Dmitronow on Posted in SEC Enforcement
We recently wrote that critics, including Judge Jed Rakoff, have been questioning the SEC’s policy of increasingly bringing enforcement actions in its administrative forum rather than federal court. We noted that several cases had been filed recently that challenged the constitutionality of the SEC’s administrative proceedings. The first of those cases has now been decided: … Continue Reading
By Scott Fishwick and Tanya Dmitronow on Posted in SEC Enforcement
The SEC is increasingly bringing enforcement actions in its administrative forum rather than federal district court, setting the stage for a legal and policy battle over this tactic. The SEC’s approach has been made possible by a series of legislative enhancements to the agency’s enforcement powers that began with the passage of the Securities Enforcement … Continue Reading
Guest Post from Proskauer’s Whistleblower Defense Blog. Written By Steven J. Pearlman, Lloyd Chinn, Harris Mufson and Noa Baddish on November 12, 2014 The U.S. District Court for the Eastern District of Wisconsin in Verfuerth v. Orion Energy Systems, Inc., No. 14-cv-352 (E.D. Wis. Nov. 4, 2014) recently ruled that the Dodd-Frank whistleblower protection provision … Continue Reading
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