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Featured Books:

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Commentary

Wealthy Investors Favor Private Equity
Well-known high net worth individuals have benefited from putting their surpluses into private equity/venture capital funds early, reports Sify.com.

Stoneridge and the Continued Reconceptualization of Implied Private Rights of Action
In Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., the Supreme Court held that the private right of action implied under Rule 10b-5, the principal anti-fraud provision of the federal securities laws, does not reach even deceptive conduct by secondary actors. An examination of the decision by Mark Perry, from Wall Street Lawyer

Remarks by Mary L. Schapiro, Chief Executive Officer, FINRA at CCO Outreach Event
Comments at the CCO outreach conference in Washington DC on March 7, 2008

Call Compliance! SEC’s ADV Proposal Could Be Costly
Registered Rep's take on the proposed changes to Form ADV

Retail Financial Advisors’ Refrain: Let’s Kill The Traders
Brokers are bitter—and for good reason. Since the sub-prime slaughter began this summer, many of those at Merrill Lynch, Smith Barney, Morgan Stanley and the other wirehouse firms, have seen their net worth, tied up largely in deferred stock, cut by a third or more. ...

News Items

SEC Stops Multi-Million Dollar Fictitious Currency Trading Program
The SEC has announced that it has obtained a court order to stop a $27 million Ponzi scheme involving investors in the United States, Canada, and other countries. The SEC charged Las Vegas-based Gold-Quest International and its three principals for the alleged misuse of investor funds in a scheme that promised incentives to investors who recruited "friends and family" into the system. The SEC alleged that Gold-Quest and its owners misrepresented that investor funds would be pooled and invested in foreign currency exchange trading and would generate annual profits of 87.5 percent. No investor money was actually invested in foreign currency exchange trading.

SEC Staff Recommends Commission Action to Facilitate Investment in Small Business
The SEC's Division of Investment Management has prepared a recommendation for consideration by the Commission to increase the availability of capital to certain smaller companies that do not have ready access to the public capital markets or other forms of conventional financing. The Division has recommended that the Commission adopt an amendment to a rule that defines the types of companies in which business development companies (BDCs) may invest most of their assets. Congress in 1980 established BDCs, which are publicly traded investment companies, to help make capital more readily available to small developing and financially troubled businesses.

BlackRock bails out its auction-rate holders
Good news for holders of Auction rate securities. Joining Nuveen and Eaton Vance, BlackRock, the second-largest manager of closed-end funds in the U.S., said that it would restructure $1.9 billion of ARPs issued by both taxable and tax-exempt closed-end funds.

That means that the holders of the ARS will not have a loss on their investment. Of couse, this all assumes that Blackrock follows through. Reports say that it has obtained 1.9 billion in financing for the bail out, but Blackrock has over 9 billion dollars in ars in its mu

FINRA Issues Guidance to Investors Caught in ARS Auction Failures
The Financial Industry Regulatory Authority (FINRA) today spelled out the options available to investors holding unexpectedly illiquid auction rate securities (ARS) because of recent developments in the credit market that have resulted in many ARS auctions failures.

Self-Regulators Warn Against Spreading False Rumors and Other Abusive Market Activity
The SROs are coordinating efforts to heighten the monitoring and investigation of trading activity in issuers that may be subject to credit market- related volatility.
The regulators are reminding brokers of the prohibitions in NYSE Rule 435(5) and NASD Rule 5120(e) against the circulation in any manner of sensational rumors that might reasonably be expected to affect market conditions, as well as their obligations under NASD Rule 2110 and NYSE Rule 476 to refrain from any conduct or activity inconsistent with just and equitable principles of trade.

Past Articles and Commentary
Every month The Securities Law Home Page brings together commentary and updates from securities law practitioners and regulators. Past articles are collected here in chronological order, or simply search for the topic you are interested in.

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Mark Astarita

SECLaw.com was created by Mark J. Astarita, Esq., a securities attorney and partner in the law firm of Beam & Astarita, LLC, who represents financial professionals in a wide variety of matters. Mr. Astarita can be contacted by email at astarita@beamlaw.com.

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