On September 23, 2020, the US Securities and Exchange Commission (SEC) adopted a Final Rule, effective 30 days after publication in the Federal Register, regarding various aspects of its whistleblower program (the Program). Two points are particularly noteworthy. First, the SEC “clarified” that it has the authority and discretion to adjust large awards. Second, there … Continue Reading
On August 26, 2020, the US Securities and Exchange Commission (SEC) adopted amendments to expand the scope of the “accredited investor” definition, allowing a greater pool of investors to access the private capital markets. The amendments add new categories of qualified natural persons who meet certain professional knowledge or certification requirements and expand the list … Continue Reading
In what appears to be a coordinated effort, the Securities Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) both issued orders relating to Plutus Financial—doing business as Abra—and its Philippines-centered partner, Plutus Technologies Philippine Corporation (Plutus Tech). The July 13, 2020 orders found Abra and Plutus Tech had violated sections of the Securities Act … Continue Reading
On July 1, 2020, FINRA issued guidance to member firms on compliance with FINRA Rule 2210 (“Rule 2210”)) on the marketing of private placements to retail investors. These private placements are typically conducted under Rules 504, 506(b) or 506(c) of Regulation D under the Securities Act of 1933, as amended, as “safe harbors” that permit … Continue Reading
The US Structured Finance Association (the “SFA”), the securitization industry group, has filed an amicus brief in support of a challenge and objection to the Motion for Order Rejecting Certain Unexpired Vehicle Leases Effective Nunc Pro Tunc to June 11, 2020 Pursuant to Sections 105 and 365(A) of the Bankruptcy Code (the “Motion”) filed by … Continue Reading
Cryptocurrency and token offerings present a regulatory paradox. The Securities and Exchange Commission contends that in various circumstances cryptocurrency and token offerings constitute “securities” that must comply with securities laws. A potential approach: “simple agreements for future tokens” or SAFTS. In a recent New York Law Journal column, Robert Schwinger, a partner in the New … Continue Reading
On March 30, 2020, the SEC ordered its third ever whistleblower award to a compliance officer in the amount of $450,000. In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which, among other things provided for the payment of monetary awards under certain circumstances to whistleblowers whose tips to the SEC … Continue Reading
Glen Barrentine is Of Counsel in the New York office of Norton Rose Fulbright. His practice focuses broadly on SEC regulated financial service clients, including broker-dealers, securities exchanges, municipal advisors and investment advisers. Glen frequency represents clients in connection with SEC and FINRA enforcement proceedings and other contentious regulatory inquiries, purchases and sales, and the … Continue Reading
As part of a comprehensive effort to alleviate strain on the commercial paper markets due to the COVID-19 pandemic, on March 17, 2020 the Board of Governors of the Federal Reserve System (the “Federal Reserve”) announced the creation of the Commercial Paper Funding Facility (“CPFF”). Similar to the CPFF program implemented in 2008, which was … Continue Reading
On March 23, 2020, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) announced a wide array of actions intended to promote economic stability in light of the COVID-19 pandemic, including several different credit facilities. The Federal Reserve announced as one of these credit facilities a renewal of the Term Asset-Backed Securities … Continue Reading
The STOCK Act clarifies that members of Congress and other congressional employees do, in fact, have a duty of trust and confidence to the Congress, the United States Government, and US citizens.… Continue Reading
On March 16, 2020, the Securities and Exchange Commission’s Division of Investment Management announced additional COVID-19 related relief. This relief is available on the SEC’s COVID-19 page, available here, and summarized below. Operation of Business From Temporary Locations. The conduct of business from temporary locations, such as an employee’s home, as part of a firm’s … Continue Reading
On March 13, 2020, the Securities and Exchange Commission (“SEC”) announced conditional, temporary relief for funds (available here) and both registered and exempt reporting investment advisers (available here) impacted by COVID-19. The relief covers in-person board meetings by fund boards and certain filing and delivery requirements for both advisers and funds. Funds and advisers that … Continue Reading
Glen Barrentine is Of Counsel in the New York office of Norton Rose Fulbright. His practice focuses broadly on SEC regulated financial service clients, including broker-dealers, securities exchanges, municipal advisors and investment advisers. Glen frequency represents clients in connection with SEC and FINRA enforcement proceedings and other contentious regulatory inquiries, purchases and sales, and the preparation … Continue Reading
In a speech to the International Blockchain Congress on February 6, 2020, Securities and Exchange (“SEC”) Commissioner Hester Peirce, sometime referred to as “Crypto Mom,” proposed a three-year safe harbor for virtual currency token projects. The safe harbor would exempt (i) the offer and sale of tokens from the provisions of the Securities Act of … Continue Reading
Glen Barrentine is Of Counsel in the New York office of Norton Rose Fulbright. His practice focuses broadly on SEC regulated financial service clients, including broker-dealers, securities exchanges, municipal advisors and investment advisers. Glen frequency represents clients in connection with SEC and FINRA enforcement proceedings and other contentious regulatory inquiries, purchases and sales, and the preparation … Continue Reading
On November 1, 2019, the U.S. Supreme Court agreed to take a case challenging the authority of the Securities and Exchange Commission (SEC) to seek and obtain disgorgement of profits from persons who violate the federal securities laws. The case is Charles C. Liu, et al., Petitioners v. Securities and Exchange Commission. The SEC has … Continue Reading
On September 30, 2019, the Securities and Exchange Commission (“SEC”) announced a settlement with Block.one, a blockchain technology company with operations in Virginia and Hong Kong, for conducting an unregistered initial coin offering (“ICO”) that raised several billion dollars’ worth of Ether from June 2017 through June 2018. The SEC alleged that Block.one, a Cayman … Continue Reading
On June 4, 2019, the Securities and Exchange Commission (“SEC”) filed a complaint against Kik Interactive, Inc. (“Kik”), which owns and operates a mobile messaging application called Kik Messenger, in connection with its 2017 initial coin offering (“ICO”) that raised over $100 million; more than $55 million of which came from U.S. investors. The SEC … Continue Reading
On April 3, 2019, the Securities and Exchange Commission (“SEC”) issued its first no-action letter related to the offering and sale of digital tokens. The beneficiary is TurnKey Jet, Inc. (“TurnKey”) which proposes to offer and sell blockchain-based digital assets in the form of “tokenized” jet cards (“Tokens”). The no-action letter, which some see as … Continue Reading
In a decision with implications for private securities fraud suits, the United States Supreme Court recently held that an investment banker that copied and pasted misstatements from his boss into emails to prospective investors committed securities fraud, despite not being the actual “maker” of the statement, because the statement was attributed to another person. In … Continue Reading
Brexit—whether it happens or not, and in what form it might (or might not) take—will shock the global marketplace. Yet despite the known unknowns in these tumultuous times, there is one certainty for public reporting companies in the United States: Brexit risks must be disclosed. On March 15, 2019, William Hinman, Director of the SEC’s … Continue Reading
On the heels of the first-ever judicial holding this past summer that a cryptocurrency could qualify as a “security” under federal securities laws, the Securities and Exchange Commission (SEC) has brought a wave of new enforcement actions targeting blockchain-based digital token ventures under a variety of provisions in the securities laws. In a recent New … Continue Reading
On February 8, 2019, SEC Commissioner Hester Peirce delivered a speech at the symposium ”Protecting the Public While Fostering Innovation and Entrepreneurship: First Principles for Optimal Regulation.” Her remarks, entitled “Regulation: A View from Inside the Machine,” provide insight into how SEC regulators currently view certain technological innovations and how they interpret and apply the … Continue Reading
