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Practice Area: Securities

SEC FINES FIRMS FOR RECORDKEEPING FAILURES RELATED TO OFF-CHANNEL COMMUNICATIONS

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The Securities and Exchange Commission (SEC) has announced charges against broker-dealers, investment advisers, and dually-registered broker-dealers and investment advisers for failures to maintain and preserve electronic communications. The firms charged have admitted their conduct violated the recordkeeping requirements of federal securities laws, agreed to pay approximately $400 million in combined fines, and begun implementing new…
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SCOTUS SCUTTLES CHEVRON DEFERENCE AND LIMITS SEC ENFORCEMENT ACTIONS

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The United States Supreme Court recently released two decisions which will impact the application of the Administrative Procedure Act and curb the Securities and Exchange Commission’s (SEC) enforcement of civil penalties. These decisions are likely to have far-reaching implications across the country, from securities rules to environmental regulations and healthcare costs. Loper In Loper Bright…
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SEC CHARGES AUDITOR BF BORGERS WITH “MASSIVE FRAUD”

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The Securities and Exchange Commission (the “SEC”) has announced settled enforcement proceedings against audit firm BF Borgers CPA PC and its owner, Benjamin F. Borgers (together, “BF Borgers”), charging them with deliberate and systemic failures to comply with Public Company Accounting Oversight Board (“PCAOB”) standards in its audits and reviews of hundreds of public companies,…
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FINRA FINES FIRM FOR SOCIAL MEDIA INFLUENCER VIOLATIONS

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FINRA recently announced M1 Finance LLC has been fined $850,000.00 for violations relating to social media posts made by influencers on the firm’s behalf.  Beginning January 2020 to April 2023, FINRA found M1 Finance compensated social media influencers for content promoting the firm. M1 Finance also requested the influencers include a hyperlink to the firm’s…
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FORMER BOARD MEMBER OF TALLGRASS ENERGY AND FOUR OTHERS CHARGED WITH INSIDER TRADING

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The Securities and Exchange Commission has charged Roy Cook, a former board member of Tallgrass Energy LP, and four of his friends with insider trading for trading on material nonpublic information in advance of a public announcement that Blackstone Infrastructure Partners had offered to acquire Tallgrass and take it private. The five defendants agreed to…
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FINRA’S 2024 REGULATORY OVERSIGHT REPORT

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FINRA has published its 2024 Regulatory Oversight Report (“Report”), which provides member firms with information from FINRA’s recent regulatory operations to strengthen their complaince departments. FINRA highlighted six key sections of the Report in its news release pertaining to the same: (1) Crypto Asset Developments; (2) Advertised Volume; (3) Cybersecurity; (4) Anti-Money Laundering (“AML”), Fraud…
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SEC APPROVES FIRST BITCOIN ETF

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On Wednesday, January 10, 2024, the Securities and Exchange Commission (“SEC”) approved the first U.S.-listed exchange traded funds (ETFs) to track bitcoin. The SEC approved 11 applications, including from BlackRock (BLK.N), Ark Investments/21Shares (ABTC.S), Fidelity, Invesco (IVZ.N) and VanEck. The approvals come a day after an unauthorized person published a fake post on the SEC’s…
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Finra Fines Four Firms $2.6 Million For Violations Relating To Fully Paid Securities Lending

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FINRA recently announced new sanctions filed against M1 Finance LLC, Open to the Public Investing, Inc., SoFi Securities LLC, and SogoTrade, Inc. for supervisory and advertising violations. The fines for these violations totaled $1.6 million. In addition to the substantial fine, FINRA also ordered the firms pay over $1 million in restitution. During its investigation,…
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Finra Gains Support Against Claim It Is Unconstitutional

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The North American Securities Administrators Association (“NASAA”) and the Public Investors Advocate Bar Association (“PIABA”) have announced their support for FINRA as it challenges Alpine Securities Corporation’s (“Alpine”) arguments that it is unconstitutional. NASAA, the membership organization for state regulators, filed an amicus brief with the District of Columbia Court of Appeals citing its support…
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Enhancements To The Expungement Process

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Effective October 16, 2023, FINRA adopted amendments to its Codes of Arbitration Procedure (Codes) to modify the process relating to requests to expunge customer dispute information in the FINRA Dispute Resolution Services (DRS) arbitration forum. FINRA operates the Central Registration Depository (CRD), and customer dispute information maintained in CRD is reported through Forms U4 and…
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