Topic: Cross border issues

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Be Careful What You Say – SEC successfully concludes enforcement proceedings against robo-advisors for false advertising and misleading disclosures

Andrew McCoombBy Andrew McCoomb on Posted in Cross border issues, Other developments, Securities regulatory decisions
On December 21, 2018, the Securities and Exchange Commission (SEC) settled proceedings against two robo-advisors for making false statements about investment products and publishing misleading advertising. The proceedings were the SEC’s first enforcement actions against robo-advisors, providing guidance on some of the disclosure issues robo-advisors may face going forward. Wealthfront proceedings The first action involved … Continue reading

Personal jurisdiction in the age of blockchain

Robert A. SchwingerBy Robert A. Schwinger on Posted in Cross border issues, Other developments
As commercial activity increasingly intertwines with applications of blockchain technology with participants around the world, courts have had to grapple with the personal jurisdiction implications of such arrangements. Will participants in these blockchain applications based outside the United States find themselves subject to U.S. jurisdiction when disputes arise, based on how they have conducted their … Continue reading

Forum Selection Clauses in Delaware Corporate Charters Invalid as to Securities Claims

Thomas J. HallBy Thomas J. Hall on Posted in Cross border issues, Other developments
The Delaware Chancery Court recently faced a challenge to forum selection clauses in certificates of incorporation of three Delaware corporations that required shareholder claims under the Securities Act of 1933 be brought in U.S. federal court, thereby barring the state forum.  For securities cases, defendant corporations generally prefer the U.S. federal courts which are viewed … Continue reading

The Hard Way – SEC announces first penalties and compliance roadmap for unregistered ICOs

Andrew McCoombBy Andrew McCoomb on Posted in Cross border issues, Other developments, Securities regulatory decisions, Uncategorized
On November 16, 2018, the Securities and Exchange Commission (SEC) announced consent orders settling actions in respect of two unregistered initial coin offerings (ICOs), including the first fines levied against non-compliant ICO issuers made by the SEC to date. The consent orders demonstrate the SEC’s willingness to follow through with enforcement proceedings against issuers of … Continue reading

DOJ provides additional insight on compliance and investigations matters

Kevin James HarnischKeith M. RosenPaul SumilasIlana Beth SinkinVijay RaoBy Kevin James Harnisch, Keith M. Rosen, Paul Sumilas, Ilana Beth Sinkin and Vijay Rao on Posted in Cross border issues, Legislation, rules and policies, Other developments, White collar crime
On October 25, 2018, John Cronan, Principal Deputy Assistant Attorney General of the Criminal Division of the US Department of Justice (DOJ), delivered an important speech that touched on several key issues for legal and compliance counsel trying to balance business realities with regulator expectations, particularly with respect to compliance with the US Foreign Corrupt … Continue reading

What auditors need to know about blockchain

Robert A. SchwingerBy Robert A. Schwinger on Posted in Cross border issues, Legislation, rules and policies, Other developments
The implications of blockchain and other disruptive technologies for many legal areas have been addressed by a variety of regulators. While much attention has been focused on the pronouncements by bodies such as the US Securities and Exchange Commission, other regulators have been looking at these matters as well. A recent speech by a member … Continue reading

Quebec Superior Court dismisses action for damages against Autorité des marchés financiers

Sophie MelchersCaroline LaroucheBy Sophie Melchers and Caroline Larouche on Posted in Civil claims, Cross border issues, Other developments
In Mallat c. Autorité des marchés financiers de France, 2018 QCCS 3867, Cohen J. granted a motion to dismiss an action brought by three Ubisoft executives (Plaintiffs) against the Autorité des marchés financiers de France (AMFF) and the Autorité des marchés financiers du Québec (AMFQ). Among many demands[1], the Plaintiffs requested declarations that the Multilateral … Continue reading

SEC to Resume Administrative Law Proceedings Following Supreme Court Ruling

Robert A. SchwingerBy Robert A. Schwinger on Posted in Cross border issues, Securities regulatory decisions
In response to the U.S. Supreme Court’s June 21, 2018 decision in Lucia v. SEC, No. 17-130, holding that administrative law judges (ALJs) at the U.S. Securities and Exchange Commission (SEC) had been improperly appointed because they had been appointed by SEC staff rather than the President or the full SEC, which was discussed in … Continue reading

The Importance of Cooperation Among Interjurisdictional Securities Regulators: United States Securities and Exchange Commission v. Autorité des marchés financiers, 2018 QCCQ 4417

Sophie MelchersBy Sophie Melchers on Posted in Cross border issues, Other developments, White collar crime
In the recent decision of United States Securities and Exchange Commission v. Autorité des marchés financiers, 2018 QCCQ 4417, the Quebec Court, Criminal and Penal Chamber held that the United States Securities and Exchange Commission (SEC) had the required interest under section 122 of the Code of penal procedure (CPP) to be allowed to examine … Continue reading

Copy and Paste Securities Fraud? The U.S. Supreme Court to Decide

Seth M. KruglakLisa SchapiraBy Seth M. Kruglak and Lisa Schapira on Posted in Cross border issues, Other developments, White collar crime
Last month, the U.S. Supreme Court granted certiorari to hear a case where an investment banker copied and pasted misstatements from his boss into emails that, at his boss’s request, he sent to prospective debenture purchasers.  In Lorenzo v. Securities and Exchange Commission, 872 F.3d 578 (D.C. Cir. 2017), a divided United States Court of Appeals … Continue reading

U.S. Supreme Court Holds SEC Administrative Law Judges Improperly Appointed

Robert A. SchwingerBy Robert A. Schwinger on Posted in Cross border issues, Securities regulatory decisions
On June 21, 2018, the U.S. Supreme Court ruled that administrative law judges (ALJs) at the U.S. Securities and Exchange Commission (SEC) had been improperly appointed because they qualified as “Officers of the United States” under the “Appointments Clause” of the U.S. Constitution, who under the Constitution may be appointed only by the President, a … Continue reading

New York Highest Court Imposes Three Year Limitations on State Attorney General Securities Actions

Thomas J. HallBy Thomas J. Hall on Posted in Cross border issues, White collar crime
On June 12, 2018, New York’s highest court issued a ruling that a three year statute of limitations, not the six year statute applicable to fraud claims, applies to claims brought under New York’s Martin Act.  People v. Credit Suisse Securities (USA) LLC, et al.  The Martin Act is the New York State Blue Sky … Continue reading

The Importance of Materiality in Secondary Market Misrepresentation Claims: Paniccia v. MDC Partners Inc. Securities Class Action

Linda FuerstDanny UrquhartBy Linda Fuerst and Danny Urquhart on Posted in Civil claims, Class actions, Cross border issues
In the recent decision of Paniccia v MDC Partners Inc., Perell J. refused to grant leave to proceed with a putative secondary market securities class action under Part XXIII.1 of the Ontario Securities Act (OSA) against MDC Partners Inc and certain of its officers on the basis that the alleged misrepresentations were not material.  The … Continue reading

US Supreme Court puts an end to untimely piggyback class actions

Darryl Anderson (US)Dan McClureGeraldine YoungLauren BrogdonBy Darryl Anderson (US), Dan McClure, Geraldine Young and Lauren Brogdon on Posted in Class actions, Cross border issues, Other developments
Companies confronting serial class actions won much needed relief from the US Supreme Court yesterday, in a decision that held that a class action tolls statutes of limitations only for putative class members’ individual claims, and not for later-filed class actions. A second class action must be filed within the limitations period, or it is … Continue reading

U.S. Securities and Exchange Commission Proposes “Best Interest” Standard for Retail Broker Dealers

Thomas J. HallBy Thomas J. Hall on Posted in Cross border issues, Legislation, rules and policies, Securities regulatory decisions
On April 18, 2018, the U.S. Securities and Exchange Commission (“SEC”) announced proposed rules that would require broker-dealers to act in the best interests of their retail clients when recommending investments. The SEC opened the proposed rules to a 90 day comment period. This announcement follows a March 15, 2018 decision by the U.S. Fifth … Continue reading

Federal court holds that CFTC can regulate virtual currencies as commodities

Robert A. SchwingerBy Robert A. Schwinger on Posted in Cross border issues, Other developments, Securities regulatory decisions
On March 6, 2018, in a fraud proceeding involving a virtual currency product, a New York federal court held that virtual currencies can be regulated by the Commodity Futures Trading Commission (CFTC) as commodities. Commodity Futures Trading Commission v. McDonnell (E.D.N.Y. Mar. 6, 2018).[1] This ruling marks the first federal judicial endorsement of the CFTC’s … Continue reading

Supreme Court Holds Individuals Must Report to the SEC to Qualify as Whistleblowers under Dodd-Frank

Mark OakesCarlos R. RainerKevin James HarnischGerard G. PechtSteve DollarIlana Beth SinkinBy Mark Oakes, Carlos R. Rainer, Kevin James Harnisch, Gerard G. Pecht, Steve Dollar and Ilana Beth Sinkin on Posted in Cross border issues, Legislation, rules and policies, Other developments
On Wednesday, February 21, 2018, the Supreme Court resolved a circuit split by unanimously holding that an employee must report suspected securities law violations to the SEC in order to qualify as a whistleblower entitled to protection from retaliation under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”).  Dodd Frank’s anti-retaliation … Continue reading

CBA Proposal for a Framework to Facilitate Court to Court Communication and Coordination of Overlapping Class Actions Clears the First Hurdle

Linda FuerstBy Linda Fuerst on Posted in Class actions, Cross border issues, Other developments
(The author was a member of the CBA National Class Actions Task Force 2016-2017) At the CBA Annual Meeting on February 15, 2018, a resolution to approve, as best practices, a revised Canadian Judicial Protocol for the Management of Multi-Jurisdictional Class Actions was approved.  The resolution also urges Canadian courts that administer class actions to … Continue reading

Ontario Court confirms jurisdiction over claims of all Canadians who purchased shares on NASDAQ and TSX: Paniccia v. MDC Partners Inc. et al, 2017 ONSC 7298

Kaitlin SmileyBy Kaitlin Smiley on Posted in Class actions, Cross border issues
Plaintiffs in class action claims for misrepresentation in the secondary market recently scored a victory when the Ontario Superior Court of Justice determined[1] that not only does it have jurisdiction over these claims brought by Canadians who purchased shares of a company registered in Canada on a foreign stock exchange, but that Canadian securities and … Continue reading

SEC takes action in respect of rogue Canadian ICO issuer

Linda FuerstAndrew McCoombBy Linda Fuerst and Andrew McCoomb on Posted in Cross border issues, Other developments, White collar crime
On December 1, 2017, the Securities and Exchange Commission (SEC) commenced a civil action in the U.S. District Court against PlexCorps (also known as PlexCoin and Sidepay.ca) and its principals, Dominic Lacroix and Sabrina Paradis-Royer, seeking civil remedies including injunctive relief, an order freezing all of the defendants’ assets and disgorgement.  The SEC alleges that … Continue reading

When is a Foreign Issuer a “Responsible Issuer” for the Purpose of Part XXIII.1 of the Ontario Securities Act?

Linda FuerstBy Linda Fuerst on Posted in Cross border issues, Shareholder disputes
In Yip v. HSBC Holdings plc et al., 2017 ONSC 5332, Justice Perell was called upon to determine the jurisdictional reach of the Ontario courts to protect Canadian and foreign investors when the defendant is a foreign corporation whose shares do not trade on a Canadian stock exchange. Yip, an Ontario resident who purchased shares … Continue reading

The Privilege Against Self-Incrimination in U.S. Criminal Proceedings: What the Decision of the United States Court of Appeals for the Second Circuit in United States of America v. Allen and Conti Means for Canadians

Linda FuerstBy Linda Fuerst on Posted in Cross border issues
On July 19, 2017 the United States Court of Appeals for the Second Circuit ruled that the Fifth Amendment’s prohibition on the use of compelled testimony in American criminal proceedings applies even when a foreign sovereign has compelled the testimony. The US. Department of Justice (DOJ) laid criminal fraud charges against the Defendants, both former … Continue reading
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