The future of SEC enforcement under the Biden administration

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
John J. Carney ◽  
Jonathan R. Barr ◽  
Teresa Goody Guillén ◽  
Jimmy Fokas ◽  
Kevin R. Edgar ◽  
...  
Keyword(s):  
Climate Change ◽  
Design Methodology ◽  
Investor Protection ◽  
Content Type ◽  
Blockchain Technology ◽  
Compliance Programs ◽  
Practical Guidance ◽  
Securities Laws ◽  
Practical Implications ◽  
Current Emphasis

Purpose To examine what to expect from Chair Gary Gensler’s SEC and the new Biden presidential administration following Chair Gensler’s U.S. Senate confirmation on April 14, 2021. Design/methodology/approach Reviews past SEC Chair Jay Clayton’s legacy and Chair Gensler’s prior regulatory actions and focus, and outlines Chair Gensler’s expected initiatives, including a heightened focus on cryptocurrency regulation, investigation of COVID-19-related fraud, and ESG and climate change disclosure. Findings This change will bring forth a Democratic majority at the SEC which, in turn, suggests that the Commission will change its current emphasis on capital formation to focus more on investor protection, rules required by the Dodd-Frank Act, inspections, examinations, and enforcement Practical implications Firms should examine their compliance programs in anticipation of heightened advocacy for investor protection; an increased focus on cryptocurrency and blockchain technology, as well as ESG disclosures with an emphasis on climate change; and an increase in inspections and examinations which will drive more enforcement in the fund industry, as well as increases in initiatives regarding transparency, additional disclosures, and investor protection. Organizations will also benefit by reexamining their existing compliance programs with the advice of counsel as a mechanism to mitigate the risk of potential securities laws violations. Originality/value Practical guidance from experienced securities enforcement and litigation lawyers.

MSRB publishes its first compliance advisory for broker-dealers

2016 ◽  
Vol 17 (3) ◽  
pp. 49-51
Author(s):  
Scott R. Anderson ◽  
Kate S. Poorbaugh
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Content Type ◽  
Compliance Programs ◽  
Policies And Procedures ◽  
Practical Guidance ◽  
Effective Compliance ◽  
Practical Implications

Purpose To summarize the Municipal Securities Rulemaking Board’s 2016 Compliance Advisory for brokers, dealers and municipal securities dealers. Design/methodology/approach Summarizes several Municipal Securities Rulemaking Board (MSRB) rules that the Compliance Advisory highlights as presenting key compliance risks for brokers, dealers and municipal securities dealers. Discusses the factors included in the Compliance Advisory that dealers should consider when evaluating compliance procedures and controls. Findings By highlighting some key compliance risks and providing considerations tailored to those risks, the Compliance Advisory can be used as a tool to aid dealers in developing and assessing effective compliance programs. Practical implications Dealers should consider reviewing their firms’ existing compliance policies and procedures in light of the considerations discussed in the Compliance Advisory. Originality/value Practical guidance from experienced securities and financial services regulatory lawyers.

Strategies for addressing investor liquidity concerns and funding capital needs in real estate funds

2020 ◽  
Vol 21 (4) ◽  
pp. 193-202
Author(s):  
James L. Broderick ◽  
Matthew L. Giles
Keyword(s):  
Real Estate ◽  
Design Methodology ◽  
Liquidity Constraints ◽  
Content Type ◽  
Credit Facility ◽  
Securities Law ◽  
Practical Guidance ◽  
Securities Laws ◽  
Practical Implications

Purpose To discuss issues that real estate fund sponsors may encounter due to investor liquidity constraints amidst the COVID-19 pandemic (such as investors seeking redemptions or transfers) and to provide guidance on potential ways that fund sponsors can prepare for, and respond to, such inquiries while at the same time addressing their fund’s liquidity needs (such as by utilizing subscription-secured credit facilities). Design/methodology/approach The article identifies the types of requests that investors may make to address their internal liquidity constraints, discusses contractual, legal, regulatory and business issues that fund sponsors should consider in responding to such requests and provides some alternatives for fund sponsors to consider allowing them to be responsive to investor liquidity concerns while also addressing fund capital needs. Findings The article finds that there are specific actions which fund sponsors should take in anticipating, and responding to, investor liquidity requests, such as reviewing partnership documents and credit facility documents and considering consequences in respect of ERISA, tax and compliance with applicable securities laws. The article also finds that specific affirmative actions by fund sponsors, such as increased borrowings under credit facilities, making distributions that are recallable and favoring transfers over withdrawals or redemptions may assist fund sponsors in preserving capital while addressing investor liquidity requests. Practical implications Fund sponsors should carefully review their fund documentation and determine their options and requirements as they pertain to potential liquidity requests. Fund sponsors should be careful to avoid foot-faults under their fund documents and credit facility agreements. Originality/value Practical guidance from experienced fund formation, securities law, tax, ERISA and finance lawyers.

MSRB publishes 2017 compliance advisory for broker-dealers

2018 ◽  
Vol 19 (1) ◽  
pp. 50-52
Author(s):  
Scott R. Anderson ◽  
James Audette ◽  
Kate S. Poorbaugh
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Content Type ◽  
Compliance Programs ◽  
Policies And Procedures ◽  
Practical Guidance ◽  
Effective Compliance ◽  
Practical Implications

Purpose To summarize the Municipal Securities Rulemaking Board’s 2017 Compliance Advisory for brokers, dealers and municipal securities dealers. Design/methodology/approach Summarizes several Municipal Securities Rulemaking Board (MSRB) rules that the Compliance Advisory highlights as presenting key compliance risks for brokers, dealers and municipal securities dealers. Discusses the factors included in the Compliance Advisory that dealers should consider when evaluating compliance procedures and controls. Findings By highlighting some key compliance risks and providing considerations tailored to those risks, the Compliance Advisory can be used as a tool to aid dealers in developing and assessing effective compliance programs. Practical implications Dealers should consider reviewing their firm’s existing compliance policies and procedures in light of the considerations discussed in the Compliance Advisory. Originality/value Practical guidance from experienced securities and financial services regulatory lawyers.

SEC enforcement actions under exchange act rule 21F-17

2017 ◽  
Vol 18 (3) ◽  
pp. 1-10 ◽  
Author(s):  
Thomas W. White
Keyword(s):  
Design Methodology ◽  
Securities And Exchange Commission ◽  
Public Companies ◽  
Content Type ◽  
Employee Communications ◽  
Practical Guidance ◽  
Sec Regulation ◽  
Securities Laws ◽  
Practical Implications

Purpose To review recent enforcement actions in which the Securities and Exchange Commission (“SEC”) enforced Rule 21F-17(a) under the Securities Exchange Act, which prohibits actions to impede whistleblower communications with the SEC, and to identify changes that entities subject to SEC regulation (including public companies, broker-dealers and investment managers) may wish to consider in their employee separation agreements and other documents that may include confidentiality provisions. Design/methodology/approach Examines settled cases since 2015, in which the SEC found that contractual provisions in employee separation agreements and other documents impeded employees from communicating with the SEC staff about possible violations of the securities laws, to identify the types of language that the SEC found to be problematic and the types of provisions that the SEC believes are desirable, if not legally mandated, to protect employee whistleblower rights and avoid impeding communications under Rule 21F-17(a). Findings Beginning in 2015, the SEC has actively enforced Rule 21F-17(a), focusing on provisions in separation agreements and other employee-related documents that potentially prevent employees from reporting legal violations to the SEC. The SEC’s efforts have resulted in settled orders involving alleged violations of the rule. The cases generally allege that provisions in employee separation agreements or other documents violated the rule because they prohibited or chilled employee communications with the SEC about possible legal violations. Practical implications Entities subject to SEC regulation (including public companies, broker-dealers and investment managers) should review their confidentiality agreements with employees and consider whether changes are warranted to address the SEC’s concerns as identified in the Rule 21F-17(a) cases. Originality/value Practical guidance regarding important whistleblower developments from experienced securities lawyer.

SEC touts whistleblower award to a compliance professional – use care in responding to reports of potential violations

2015 ◽  
Vol 16 (1) ◽  
pp. 77-78
Author(s):  
Mark Srere ◽  
Mary Beth Buchanan ◽  
Elaine Koch ◽  
Jennifer Mammen ◽  
Tyson A. Johnson
Keyword(s):  
Design Methodology ◽  
Securities And Exchange Commission ◽  
Content Type ◽  
Compliance Programs ◽  
The Us ◽  
Compliance Audit ◽  
Practical Guidance ◽  
Credible Information ◽  
Practical Implications

Purpose – To highlight the first award granted under the US Securities and Exchange Commission Whistleblower Program to a compliance professional. Design/methodology/approach – Explains the first award issued to a compliance professional under the SEC’s Whistleblower program and the rules for issuing such an award. Findings – The SEC has emphasized this award to a compliance professional, noting that individuals performing compliance, audit, and legal functions are on the front lines against fraud and corruption and are often privy to the very kinds of specific, timely, and credible information that can prevent an imminent fraud or stop an ongoing fraud. The SEC’s specific courting of compliance and audit personnel makes it even more important for companies to pay particular attention to complaints raised by those individuals. Practical implications – Companies should continue to take steps to ensure that they have vigorous compliance programs in place to detect potential issues and to respond immediately and effectively to internally reported information. Originality/value – Practical guidance from experienced regulatory and employment lawyers.

Securities regulators’ overlapping priorities provide guidance for examination preparation

2017 ◽  
Vol 18 (1) ◽  
pp. 15-18
Author(s):  
Daniel A. Nathan ◽  
Elizabeth Marshall
Keyword(s):  
Design Methodology ◽  
Securities And Exchange Commission ◽  
Financial Industry ◽  
Content Type ◽  
Compliance Programs ◽  
Key Issues ◽  
Practical Guidance ◽  
Investment Advisers ◽  
Examination Preparation ◽  
Practical Implications

Purpose To summarize and interpret the examination priorities for 2017 published in early January by the Financial Industry Regulatory Authority (“FINRA”) and the Office of Compliance Inspections and Examinations (“OCIE”) of the Securities and Exchange Commission (“SEC”). Design/methodology/approach Summarizes some of the most important priorities raised by the OCIE and FINRA in the areas of senior investors, recidivist representatives, product suitability, complex investments and sales practices, cybersecurity, branch offices and anti-money laundering. Findings As in recent years, there is a significant overlap in priorities between the two regulators on issues of elderly investors, recidivist representatives, product suitability, and cybersecurity, among others. Practical implications Registered investment advisers and broker-dealers should note the key issues raised in both letters so that their compliance programs can address them in their policies, procedures, and controls before their next examination. Originality/value Practical guidance from lawyers whose practices focus on securities and broker-dealer enforcement defense.

SEC permits abbreviated tender and exchange offers for non-convertible high-yield and investment-grade debt securities

2015 ◽  
Vol 16 (3) ◽  
pp. 28-29
Author(s):  
Ian B. Blumenstein ◽  
J. Eric Maki ◽  
John T. Owen
Keyword(s):  
Design Methodology ◽  
High Yield ◽  
Content Type ◽  
Efficient Mechanism ◽  
Practical Guidance ◽  
Traditional Structures ◽  
Investment Grade ◽  
Practical Implications

Purpose – To advise companies of a recent SEC no-action letter relating to tender and exchange offers for certain debt securities. Design/methodology/approach – Reviews various conditions allowing an issuer to use a shortened timeframe in which certain debt tender/exchange offers need be kept open for as few as five business days. Findings – The abbreviated debt tender/exchange offer structure contemplated by the no-action letter provides a more efficient mechanism for conducting debt tender/exchange offers in certain circumstances. Practical implications – Issuers conducting a debt tender/exchange offer should consider whether the new abbreviated structure is more effective in achieving their objectives than the more traditional structures. Originality/value – Practical guidance from experienced securities regulatory lawyers that gives an overview of important developments in debt tender/exchange offer practice.

Blockchain basics

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Keyword(s):  
Case Studies ◽  
Design Methodology ◽  
Reading Time ◽  
Global Scale ◽  
Fashion Industry ◽  
Content Type ◽  
Sustainable Supply Chains ◽  
Blockchain Technology ◽  
Pertinent Information ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings Sustainable supply chains in the fashion industry are under pressure to become more resilient and ubiquitous. Blockchain technology may be the key to implementing transparency on a global scale. Originality/value The briefing saves busy executives, strategists and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

The rainbow sign: climate change and corporate reputation

2019 ◽  
Vol 40 (3) ◽  
pp. 52-56
Author(s):  
Peter Buell Hirsch
Keyword(s):  
Climate Change ◽  
Corporate Reputation ◽  
Design Methodology ◽  
Positive Impact ◽  
Social Implications ◽  
Content Type ◽  
Secondary Literature ◽  
Qualitative Interpretation ◽  
Practical Implications

Purpose This paper aims to highlight the increasing importance corporate responses to climate change will play in corporate reputation. Design/methodology/approach Review of the relevant secondary literature Findings Companies that develop active responses to climate change will see positive impact on their corporate reputation. Research limitations/implications The review of the secondary literature is not comprehensive and subject to the author’s qualitative interpretation of it. Practical implications Companies that follow the recommendations will see a benefit in stakeholder appreciation. Social implications The more companies embrace a proactive stance on climate change, the more likely society is to meet the 2 per cent goal. Originality/value To the best of the author’s knowledge, this is the first treatment of climate change from the perspective of corporate reputation.

ESMA issues Brexit opinions to EU regulators: a warning shot not only to the UK but also to the EU27

2017 ◽  
Vol 18 (4) ◽  
pp. 50-52
Author(s):  
William Yonge ◽  
Simon Currie
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Content Type ◽  
Regulatory Response ◽  
Market Participants ◽  
Financial Firms ◽  
Practical Guidance ◽  
The Uk ◽  
Practical Implications ◽  
The Eu

Purpose To summarize and analyse four opinions issued in May and July 2017 by the European Securities and Markets Authority (“ESMA”) concerning regulatory and supervisory arbitrage risks that arise as a result of increased requests from financial market participants to relocate activities and functions in the EU27 following the UK’s decision to withdraw from the EU, and the expected regulatory response to those risks. Design/methodology/approach Discusses the possible relocation of financial firms, activities and functions following the UK’s decision to withdraw from EU; the resulting cross-sectoral regulatory and supervisory arbitrage risks that ESMA foresees; nine principles that ESMA enumerates to guide its regulatory response to those risks; some common themes that emerge from ESMA’s July Opinions; and the implications for UK firms and trading venues seeking to establish a presence in the EU 27. Findings ESMA foresees regulatory and arbitrage risks in Brexit and a potential “race to the bottom” as certain national regulators jostle for and grab UK market share. Practical implications UK firms and trading venues seeking to establish a presence in the EU27 from which to operate will need to give detailed consideration and focus to the resources and operational substance which will need to be located in the jurisdiction in which that presence is established. Originality/value Practical guidance from experienced financial services, securities and fund management lawyers.

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