Skip to content

News & Media

Advanced Concepts of Broker-Dealer Compliance

Disclosure of conflicts resulting from a broker-dealer’s recommendations to clients and the public and the other activities of the recommending broker-dealer, such as investment banking, market making and its proprietary trading, have been a long-standing issue in the industry. It has recently received renewed emphasis from the Securities and Exchange Commission (“SEC”). The principal catalyst […]

Capital, Customer Funds and Margin After the Commodity Futures Modernization Act of 2000

The Commodity Futures Modernization Act of 2000 (“CFMA”) made fundamental changes in several federal acts, including the CEA, SEC “34 Act” and the Investment Advisers Act of 1940,6. This article focuses on changes affecting the financial responsibility requirements of broker-dealers, futures commission merchants, and introducing brokers as a result of CFMA and subsequent regulations, as […]

Managing Regulatory Investigations and Examinations for Cause

It is critically important that broker-dealers and investment advisers recognize when an examination by the SEC, an SRO, or a state is an examination for cause and how to deal with such an examination or investigation. This article details how the SEC, the SROs and states conduct for-cause examinations and investigations, and provides practical advice […]

Regulatory Examinations For Cause

The number of for-cause examinations and investigations by the SEC and self-regulatory organizations (“SROs”) and state securities departments (“state”) has increased markedly over the last several years and will probably continue to increase. High volume, new products and the market downturn have resulted in an increased number of complaints to regulators resulting in more examinations […]

Supervision of Branch Offices, OSI’s and Offsite Brokers and Independent Contractors

Supervisory responsibilities in connection with branch offices, offices of supervisory jurisdiction (“OSJs”), and offsite brokers, including independent contractors, can be particularly challenging. Without on-site supervisors and compliance personnel, there are more opportunities for supervisory failures and sales practice abuse. The most serious of these problems is selling away of securities products or Ponzi schemes, many […]

Broker-Dealer Customer and Recruiting Disputes

This article focuses on selected customer litigation issues that arise in customer disputes and unfair competition. The areas covered include controversies dealing with arbitrator selection, discovery in arbitration, emerging on-line brokerage litigation issues, clearing firm liability, and correspondent arbitration agreement coverage under clearing firm customer agreements. The content sets forth the procedural or substantive rules […]

The Post-Sale Duty to Warn and Recall: Are They Preempted When NHTSA or the CPSC Oversees the Manufacturer’s Conduct?

When the American Law Institute introduced the Restatement 3rd of Torts (the “Third Restatement”), which included, for the first time, sections proclaiming that sellers of commercial products had post-sale duties to consumers, it announced a manufacturer’s post-sale duty to warn of product risks, whether or not the product was defective at the time sold. This […]

Who is a Proprietary Trader? A Changing and Rocky Landscape

In a 2000 article, we noted increasing attention and focus on whether individuals described as “proprietary traders” were truly trading on behalf of a firm or were, in fact, customers trading under the guise of proprietary trader. Nearly four years later, regulatory guidance in this area remains inconsistent and continues to result in uncertainty and […]

Securities Sites and Online Trading Become Regulatory Priorities

Issues faced by regulators include the validity of electronic signatures, disclosures required in online trading, whether hyperlinks are regulated with the documents in which they are embedded, what obligations online sites have to day traders, when offers to buy can be accepted in IPOs, and more. Inconsistencies between the U.S. and other national and regional […]

Regulation of Electronic Communication, Execution and Delivery of Documents to FCM/BDs

The CFTC has taken a definitive position that electronic signatures are permitted for customer agreements, required disclosure consents and other documents where signatures were previously required. CFTC Rule 1.4, 17 C.F.R. 1.4. Neither the CFTC nor the National Futures Association (“NFA’) mandates customer agreements; however, they do mandate customer acknowledgment of margin disclosures and agreements […]

When is an FCM, CTA or Pool a Securities Broker-Dealer, an Investment Adviser or an Investment Company Under the Securities Laws?

Futures Commission Merchants (“FCMs”), Commodity Trading Advisers (“CTAs”), Commodity Pool Operators (“CPOs”) and commodity pools frequently deal with securities incidental to futures and futures activities. Considerable uncertainty exists as to when these securities activities trigger registration as a broker-dealer, investment adviser or investment company. These uncertainties have increased dramatically in the last year, as electronic […]

State and Federal Court Litigation Involving Futures and Derivatives

This article compares the advantages and disadvantages of litigation in federal or state court with reparations proceedings under the Commodities Exchange Act (“CEA”) and arbitration under the rules of futures exchanges or the National Futures Association (“NFA”). The content discusses the jurisdictional basis for litigation and the substantive claims that may be filed in state […]

Lawrence Kamin maintains this website to provide general information about its services and legal expertise. While we try to keep the information timely and accurate, we make no guarantees. We make every effort to correct errors brought to our attention. Full Disclaimer
† Select attorneys have received this recognition
Website developed in accordance with Web Content Accessibility Guidelines 2.0.