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THE SECURITIES
LAW LETTER |
December 2002 |
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Welcome to this month's edition of the Securities Law Letter, an electronic newsletter for securities attorneys, securities professionals and investors, covering the law of the United States securities markets. This newsletter is a publication of SECLaw.com, and is sponsored by Mark J. Astarita, Esq. Nothing contained in this newsletter should be construed as legal advice. If you have any questions relating to any of the matters addressed in this issue, please feel free to contact Mr. Astarita at astarita@seclaw.com
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Commentary
NASD
Dispute Resolution Seeks Arbitrators in Selected Cities
NASD Dispute Resolution is actively recruiting new Arbitrators, with special
emphasis in particular cities.
Perino
Arbitrator Disclosure Report Reviewed
Arbitrator Selection and Disclosure Analyzed; California Standards Rejected
NYSE
Statements on California Arbitration
Comments on the Perino Report and the California Court Decision
Arbitrator
Disclosure Report Released
The November 13, 2002 SEC News Digest summarizes the findings and
recommendations of a study on arbitrator disclosures sparked by the California
Judicial Council controversy.
News Items
NYSE
Awards 10/02
Thirty Awards, Including a 9 Million Dollar Member-Member Award, and a Loss for
a Customer in An Employee Stock Option Case Against Goldman
NASD
Arbitration Stats - 10/02
Filings Up 38% over 2000, Open vs. Closed Gap Widens
SEC,
NYSE, NASD Fine Firms $8.25 Million for Failure To Preserve E-Mail
Communications
The Securities and Exchange Commission, the New York Stock Exchange and NASD
today announced joint actions against five broker-dealers for violations of
record-keeping requirements concerning e-mail communications. The firms
consented to the imposition of fines totaling $8.25 million, along with a
requirement to review their procedures to ensure compliance with record-keeping
statutes and rules.
SEC
Brings First Regulation FD Enforcement Actions
The first Reg FD enforcement actions were commenced against Raytheon Company,
Secure Computing Corporation, Siebel Systems, Inc., and Motorola, Inc., Release
No. 34-46898. These are the first Regulation FD enforcement actions taken by
the Commission. The complaints allege that the companies had conveyed the
market-moving information -- which moved the stock price as much as 20% in a
single day -- either in one-on-one calls with analysts and investors, or at a
conference with a group of institutional investors, without providing it
simultaneously to the public.
Partial
settlement seen in WorldCom case
A federal judge was expected to rule on a partial settlement of securities
fraud charges against bankrupt WorldCom Inc. that would prevent the company
from violating certain securities laws, an official with the Securities and
Exchange Commission said on Tuesday.
NASD
Extends Rule 2711 Compliance Deadline for Small Firms
NASD has filed with the SEC a proposed rule change to establish May 5, 2003 as
the effective date for Rules 2711(b) and (c) for members that over the previous
three years, on average per year, have participated in 10 or fewer investment
banking transactions as manager or co-manager and generated $5 million or less
in gross investment banking revenues from those transactions. Rules 2711(b) and
(c) prohibit a research analyst from being subject to the supervision or
control of any employee of a member's investment banking department and further
require legal or compliance personnel to intermediate certain communications
between the research department and the investment banking department or the
company that is the subject of a research report or recommendation.
N.Y.
attorney general takes lead in cleaning up Wall Street
Interesting story about AG Spitzer filling the Pitt void, but did Spitzer and
the CA AG really "call each other out" for a fist fight?
Judge
dismisses suit challenging California arbitration rules
A California Judge dismissed the NASD and NYSE lawsuit against the California
Judicial Council which sought to undo California's overly strict arbitration
standards for arbitrators.
SEC
Accepts Resignation of Judge Webster
November 12, 2002 - SEC Chairman Pitt's comments as he accepted on behalf of
the Commission the resignation of William H. Webster as chairman of the Public
Company Accounting Oversight Board.
States
seek stiffer penalties for securities fraud
Eager to jail more corporate crooks, state enforcers are seeking to strengthen
state laws against financial fraud. It may not be a good idea.
Recent Court Decisions
Court
Compels Arbitration in Selling Away Case
Customer is "customer" of broker, therefore he is a customer of the
firm?
Unregistered
Broker Voids Firm's Ability to Compel Arbitration
Court holds that customer agreement for account with unregistered broker is
unenforceable.
Rule Changes and Proposals
SEC
Proposes Implementation of Standards of Professional Conduct for Attorneys
Rules
The SEC is soliciting comments on a proposed rule that would establish
standards of professional conduct for attorneys who appear and practice before
the Commission on behalf of issuers. Sarbanes-Oxley requires the SEC to adopt
such standards, including a rule requiring an attorney to report evidence of a
material violation of securities laws or breach of fiduciary duty or similar
violation by the company or any agent thereof to the chief legal counsel or the
chief executive officer of the company (or the equivalent); and, if they do not
respond appropriately to the evidence, requiring the attorney to report the
evidence to the audit committee, another committee of independent directors, or
the full board of directors. Proposed Part 205 responds to this directive and
is intended to protect investors and increase their confidence in public
companies by ensuring that attorneys who work for those companies do not ignore
evidence of material misconduct. Comment period expires December 18, 2002.
SEC
Proposes New Retention of Records Relevant to Audits and Reviews Rules
The SEC is proposing rules requiring accounting firms to retain for five years
certain records relevant to their audits and reviews of issuers' financial
statements. Records to be retained would include an accounting firm's
workpapers and certain other documents that contain conclusions, opinions,
analyses, or financial data related to the audit or review. Comment period ends
December 27, 2002
If you have any questions or comments about any of the issues raised in this newsletter, or about securities law in general, please contact Mark J. Astarita, Esq.
Beam Astarita, LLC
67 Wall Street, Suite 2211
New York, NY 10005
212-509-6544
astarita@seclaw.com
Discussions regarding these topics, and other securities law related issues
are ongoing at The
Securities Law Forums, the discussion center at The Securities Law Home Page. The Securities
Law Letter is a monthly publication of The Securities Law Home Page,
http://www.seclaw.com, and is available by email. It is for informational
purposes only,
it does not constitute legal advice, and should not be used as such.
To subscribe, send an email to seclaw2000@yahoo.com with the words "subscribe text" in the subject line.
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Copyright 2001, VGIS Communications and Mark J. Astarita.