November 21, 2013
SEC FINES KNIGHT CAPITAL $12 MILLION IN FIRST EVER MARKET ACCESS RULE ENFORCEMENT ACTION
On October 16, 2013, the SEC agreed to a settlement with Knight Capital Americas LLC (“Knight”) after charging Knight with violating Exchange Act Rule 15c3-5 (the “Rule”) for failing to adequately manage the risks connected with market access. As part of the settlement, Knight was censured and agreed to pay…
October 25, 2013
SEC and FINRA Issue Proposed Rules on Crowdfunding
On October 23, 2013, the SEC in an Open Meeting issued proposed regulations enabling crowdfunding under Title III of the JOBS Act. The new regulation is called Regulation Crowdfunding and if finalized will create rules under the 33 Act and the 34 Act that we enable small businesses to raise capital with an exemption from registration of their securities.
September 25, 2013
SEC Amends Broker-Dealer Financial Responsibility and Reporting Rules
On July 30, 2013, the SEC adopted amendments to its financial responsibility rules, including changes to the net capital rule, the customer protection rule, the recordkeeping rules and the notification rules applicable to broker-dealers under the Securities Exchange Act of 1934,. The SEC first proposed the amendments on March 9,…
September 18, 2013
SEC Establishes Registration Rules for Municipal Advisors
The SEC has adopted permanent registration rules for municipal advisors as required by the Dodd-Frank Act. The new rules, which will become effective 60 days after they are published in the Federal register, require a municipal advisor to permanently register with the SEC if it provides advice on the issuance of municipal securities, municipal derivates or about certain investment strategies for proceeds from the sale of municipal securities. Registered municipal advisors will have to adhere to standards for training, qualification and conduct, including the treatment of conflicts of interest.
July 11, 2013
SEC Lifts Ban on General Solicitation and General Advertising for Certain Private Placements
In its open meeting on July 10, 2013, the SEC lifted the ban on general solicitation and advertising for certain private placements under Rule 506 and Rule 144A. These amendments to the rules become effective 60 days after they are published in the Federal Register. Broker-dealers should note that…
July 2, 2013
District Court Does Not Require Broker Dealer Registration for Foreign Transactions
On March 28, 2013, in SEC v. Benger, the U.S. District Court for the Northern District of Illinois held that the registration requirements under Section 15(a) of the Exchange Act do not apply to foreign transactions. As a consequence of this holding, brokers and dealers based in the United States whose activities are limited solely to foreign sales of stock (and whose activities fall under the jurisdiction of the Northern District of Illinois) are not required to be registered with the SEC. There is a possibility that the SEC will appeal this decision in the near future.
June 27, 2013
SEC Fines NASDAQ for Violations Surrounding Facebook IPO
On May 29, 2013, the SEC charged NASDAQ and NASDAQ Execution Services (“NES”), a registered broker-dealer affiliated with the exchange, with violations of securities laws and regulations due to inadequate systems and poor decision-making during the IPO and preliminary secondary market trading of Facebook. Without admitting to or denying SEC findings, NASDAQ has agreed to settle the charges for $10 million—the largest penalty ever imposed on an exchange. NASDAQ has also agreed to implement changes to systems and processes, including technical improvements to its cross systems, additional processes for ensuring compliance with Regulations NMS and SHO, increased oversight for new systems, an enlarged Regulatory Group, an engineering team dedicated to system monitoring and analysis, and improved software for all technology personnel. Pursuant to the settlement order, the SEC has reserved the right to request evidence of the satisfactory completion of these undertakings should it be deemed necessary.
June 17, 2013
SEC Grants No-Action Relief Permitting German-based Strategy Consulting Firm to Engage in M&A Activities with U.S. Targets without Registering as Broker-Dealer
The SEC has granted no-action relief to Roland Berger Strategy Consultants (“Roland Berger” or the “Firm”) stating that it would not recommend enforcement action under Section 15(a) of the Exchange Act if Roland Berger were to engage in certain activities without registering as a broker or dealer. Roland Berger is an independent strategy consultancy firm based in Germany that engages in a wide range of services on behalf of non-U.S. clients. The majority of services that Roland Berger provides do not qualify as “broker” activities, but the Firm is occasionally involved in international M&A activities that may require registration as a broker-dealer under the Exchange Act.
June 3, 2013
Robert E. Rice New Chief Counsel to SEC Chair
SEC Chair Mary Jo White announced on June 3, 2013, that she has appointed Robert E. Rice as her Chief Counsel.
May 29, 2013
New SEC Commissioners Nominated
On May 21, 2013 President Obama nominated two senior senate aides to the SEC. If approved, Kara M. Stein, an aide to Jack Reed (D-RI) will replace Elisse B. Walter and Troy A. Piwowar, chief Republican economist on the Senate Banking Committee will replace Troy A. Paredes.