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
On January 4, 2019, two Colorado senators introduced the “Colorado Digital Token Act,” a bill seeking to exempt digital tokens and cryptocurrencies from certain Colorado state securities laws. In filing the Colorado Digital Token Act, the senators proposed that digital tokens with a “primarily consumptive purpose” that are not marketed to be used for “speculative … Continue Reading
As a result of the United States Congress not adopting an appropriations bill or a continuing resolution to fund specific government departments, agencies or functions, certain federal agencies are currently subject to a partial government shutdown. Below is an overview of how the partial federal government shutdown is affecting financial or other major regulatory agencies: … Continue Reading
On November 16, 2018, the Securities and Exchange Commission (“SEC”) issued a statement on the application of federal securities laws to the issuance and trading of, and investment in, digital asset securities. While the statement encourages technological innovations that benefit investors and capital markets, it emphasizes that market participants must still adhere to federal securities … Continue Reading
On September 27, 2018, both the Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading Commission (“CFTC”) filed charges against Marshall Islands-based firm 1pool Ltd. (“1pool”) and its Austria-based CEO and owner, Patrick Brunner, for (i) failing to register as a security-based swaps dealer with the SEC, (ii) failing to register as a futures … Continue Reading
For the first time, a US federal court has ruled that in appropriate circumstances cryptocurrencies can be subject to the provisions of US securities laws. In U.S. v. Zaslavskiy, No. 1:17-cr-00647, slip op., 2018 WL 4346339 (E.D.N.Y. Sept. 11, 2018), Judge Raymond Dearie of the Eastern District of New York upheld a criminal indictment for … Continue Reading
On July 18, 2018, the Securities and Exchange Commission (“SEC”) voted to adopt amendments to Regulation ATS that impose additional public disclosure requirements on, and enhance the SEC’s oversight of alternative trading systems (“ATSs”) that facilitate transactions in National Market System stocks (“NMS Stock ATSs”). Regulation ATS, adopted in 1998, established a regulatory framework intended … Continue Reading
On June 21, 2018, the US Supreme Court issued an opinion holding that the Securities and Exchange Commission (SEC) failed to follow the appropriate constitutional processes for appointing its administrative law judges. You can find here a detailed analysis of the decision and its ramifications not only for the SEC but for administrative law judges … Continue Reading
On May 30, 2018, the Federal Reserve Board was the first of the five financial services regulators responsible for the Volcker Rule to approve proposed changes agreed by the regulators. Between May 31 and June 5, 2018, the Federal Deposit Insurance Corporation, the Comptroller of the Currency, the Commodity Futures Trading Commission and the Securities … Continue Reading
In his June 6, 2018, interview with CNBC, Securities and Exchange Commission (“SEC”) Chairman Jay Clayton further clarified the regulatory landscape around cryptocurrencies, blockchain technology and initial coin offerings, nothing that the SEC would not support changing the traditional definition of a security to take into account this new technology: “Where I give you my … Continue Reading
On May 24, 2018, the President signed Public Law 115-174, the “Economic Growth, Regulatory Relief, and Consumer Protection Act,” which includes some revisions to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”), but not its wholesale repeal. The Law addresses such diverse areas as revised bank systemic risk standards, easing of … Continue Reading
On April 17, 2018, New York Attorney General Eric T. Schneiderman took the first steps in launching the new Virtual Markets Integrity Initiative through a fact-finding questionnaire sent to thirteen of the major cryptocurrency trading platforms. The Initiative’s focus is protecting consumers and increasing transparency for both investors and enforcement agencies. “Yet too often, consumers … Continue Reading
A growing number of companies are turning to initial coin offerings—called ICOs—as an innovative way to raise capital. But do people really know what are they and how they work? Please check out this article by Andrew Lom, Rita Astoor and Rachael Browndorf on ICOs that includes a description of what ICOs are, how the … Continue Reading
Norton Rose Fulbright New York office’s next financial services briefing is a luncheon seminar set for Tuesday, April 17, 2018, at 12:00-1:00 PM EDT. Norton Rose Fulbright’s senior practitioners periodically provide interested in-house counsel and professionals with an insightful discussion on current regulatory trends within the financial services sector. The April briefing will be both … Continue Reading
On February 9, 2018, a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit (the “D.C. Circuit”) issued a major decision regarding credit risk retention requirements. Following the 2007-2008 financial crisis, Congress passed the Dodd-Frank Act (“Dodd-Frank”) in an effort to avert a future crisis and as part of … Continue Reading
On Wednesday, February 21, 2018, the US Supreme Court resolved a circuit split by unanimously holding that an employee must report suspected securities law violations to the US Securities and Exchange Commission (“SEC”) in order to qualify as a whistleblower entitled to protection from retaliation under the Dodd-Frank Wall Street Reform and Consumer Protection Act … Continue Reading
Norton Rose Fulbright New York office’s next financial services briefing is a luncheon seminar set for Thursday, February 1, 2018, at 12:00-1:00 PM EST. Each month, Norton Rose Fulbright’s senior practitioners will provide interested in-house counsel and professionals with an insightful discussion on current regulatory trends within the financial services sector. The February briefing will … Continue Reading
