Tag archives: SEC

COVID-19 Scams on the Rise and Enforcement on the Horizon

Photo of Ted BrookBy Ted Brook on Posted in Cross border issues, Other developments, White collar crime
As COVID-19 continues to impact capital markets around the world, securities regulators in North America are responding to an increasing number of securities-related scams. Provincial securities regulators across Canada, as well as the United States Securities and Exchange Commission, have now issued official warnings about fraudulent investment offerings and other scams that target investors. Many … Continue reading

Alberta Securities Commission signs Enhanced Memorandum of Understanding to strengthen cross-border enforcement cooperation

Photo of Steven LeitlBy Steven Leitl on Posted in Cross border issues, Legislation, rules and policies, Other developments
In July 2019, the Alberta Securities Commission (ASC) joined other signatories, including the Ontario Securities Commission and the United States Securities and Exchange Commission (SEC), by signing the International Organization of Securities Commissions’ (IOSCO) Enhanced Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information (EMMoU). This step by the ASC reflects … Continue reading

US Tenth Circuit holds SEC can apply antifraud provisions extraterritorially in certain situations

Photo of Seth M. KruglakBy Seth M. Kruglak on Posted in Cross border issues, Other developments, White collar crime
One trend running through recent U.S. Supreme Court decisions is a sense of caution in expanding the scope of U.S. law to extraterritorial activities.  To that end, the Court has instructed that a statute does not apply extraterritorially unless the text clearly shows the U.S. Congress intended such a result.  Notably, the Tenth Circuit recently … Continue reading

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

Photo of 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

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

Photo of 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

SEC to Resume Administrative Law Proceedings Following Supreme Court Ruling

Photo of 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

Photo of 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

Photo of Seth M. KruglakPhoto of Lisa 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

Photo of 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

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

Photo of 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

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

Photo of Mark OakesPhoto of Carlos R. RainerPhoto of Kevin James HarnischPhoto of Gerard G. PechtPhoto of Steve DollarPhoto of Ilana 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

SEC takes action in respect of rogue Canadian ICO issuer

Photo of Linda FuerstPhoto of Andrew 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

SEC action against hedge fund raises difficult questions for investment advisers

Photo of Kevin James HarnischBy Kevin James Harnisch on Posted in Legislation, rules and policies, Securities regulatory decisions
The SEC recently extracted a settlement from a hedge fund that raises difficult compliance-related questions for investment advisers. On August 21, 2017, Deerfield Management Company L.P. (“Deerfield”), a hedge fund and registered investment adviser, paid approximately $4.6 million to settle SEC charges that Deerfield failed to create and enforce policies and procedures reasonably designed to … Continue reading

Mitigating Securities Litigation Risk From Software Problems

Photo of Gerard G. PechtPhoto of Peter A. StokesBy Gerard G. Pecht and Peter A. Stokes on Posted in Class actions, Other developments
Public companies can face significant securities litigation risk over defective algorithms, data errors and software glitches. As securities class action filings continue to increase across the board, plaintiffs lawyers have attacked numerous companies over stock price declines that occur after software problems are revealed. Recent court decisions denying dismissal in securities class actions against Fitbit … Continue reading

SEC ruling on The DAO signals increased acceptance of blockchain-based securities

Photo of Andrew McCoombBy Andrew McCoomb on Posted in Securities regulatory decisions
On July 25, 2017, the Securities and Exchange Commission (SEC) issued a statement on the regulatory significance of offers and sales of digital assets carried out using distributed ledger or blockchain technology.  That statement followed the SEC’s Report of Investigation into The DAO, an unincorporated organization designed to issue tokens administered on a distributed ledger … Continue reading

Only 61% of issuers address cyber security in their risk factor disclosure. Is your company one of them?

Securities litigation and enforcementBy Danny Urquhart on Posted in Legislation, rules and policies, Other developments
Earlier this year, the Canadian Securities Administrators (CSA) released the results of a review of the disclosure of 240 issuers in the S&P/TSX composite index on cyber security issues.  The review found that only 61% of issuers addressed cyber security in their risk factor disclosure, 20% of these issuers had identified a person or group … Continue reading
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