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Recent Securities Law posts - Justia

Last 20 posts indexed in the Securities Law category on Justia

WBFF Fox 45 in Baltimore Investigates Stricker Street Fire According to Fox 45, “The report describes confusion over which firefighters were on scene that day and who was trapped inside the collapsed, burning structure. . . . ” “One of the most glaring problems on that January day, the firefighters had no idea they were walking into an unsafe vacant home that had been on fire twice before.” Continue reading ›
Author: Dan Miller
Posted: December 3, 2022, 11:39 pm
Investors in private placement securities including Madison Funding I bonds and Poet’s Walk Funding I bonds, may have legal claims, if their investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the stockbroker or advisor. The brokerage firm Herbert J Sims & Co., a/k/a HJ Sims reportedly offers to investors a number of private placement investments that the firm itself structures and establishes.  For example, a private placement known as Madison Funding I, LLC was brought to market in 2019 by HJ Sims and issued $5,115,000 in bonds due June 1, 2024.  The Madison Funding I bonds reportedly defaulted on principal payments due March 2, 2021 and have paid reduced interest since.  Despite the default, Madison Funding I bonds are reportedly shown as having a full value of $100 on customer account statements. In another private placement offering,…
Author: InvestorLawyers
Posted: December 3, 2022, 6:09 pm
Investors in Hartman vREIT XXXI Inc., a publicly registered, non-traded real estate investment trust, may have FINRA arbitration claims, if their investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the stockbroker or advisor. In its recently filed quarterly report with the Securities and Exchange Commission, Hartman vREIT XXXI Inc. announced its management’s “substantial doubt about the company’s ability to continue as a going concern.”  The REIT reportedly has two revolving credit loans totaling $55 million that mature in March 2023.  The REIT also has a $2.41 million term loan that is also due to mature in March- calling into question where the REIT will turn for cash when these loans come due. In the SEC filing, Hartman vREIT XXXI’s management indicates that it has concluded that there is substantial doubt about the…
Author: InvestorLawyers
Posted: December 2, 2022, 9:17 pm
By Jay Fishman, J.D.A leading global market maker with a significant interest in ensuring success and efficiency in the U.S. retail securities market has filed a complaint against the SEC in New York’s Southern District Court for allegedly stonewalling the plaintiff’s request for records in advance of retail stock order proposed rules the Commission plans to announce by 2022 year-end. Because the SEC has not submitted a single record since the initial request in June 2022, the plaintiff claims the Freedom of Information Act (FOIA) has been violated and demands the SEC: (1) conduct a reasonable search for all non-exempt records; (2) be enjoined from continuing to withhold non-exempt records; (3) be provided a reasonable deadline to comply with the records request; and (4) award the plaintiff reasonable attorneys’ fees and costs (Virtu Financial, Inc. v. SEC, November 29, 2022).FOIA complaint violation. On June 21, 2022, the plaintiff’s attorney sent the…
Author: Unknown
Posted: December 2, 2022, 8:03 pm
FSC Securities, Royal Alliance, SagePoint and Woodbury Censured & Fined for Unsuitable Sales of GPB Offerings    According to The Financial Industry Regulatory Authority (FINRA), between May 4, 2018, and June 29, 2018, FSC Securities, Royal Alliance, SagePoint Financial and Woodbury Financial negligently failed to communicate to investors that in an offering that GPB Capital Holdings, LLC failed to timely make required filings with the Securities and Exchange Commission, including filing audited financial statements. According to FINRA, each firm violated FINRA Rule 2010.   Last February we reported that the CEO of GPB Capital Holdings, a New York-based registered investment adviser, and two others were arrested in connection with a massive “Ponzi-like scheme” that allegedly defrauded 17,000 investors across the U.S. out of more than $1.7 billion, according to the U.S. Attorney’s Office for the Eastern District of…
Author: The White Law Group
Posted: December 2, 2022, 6:12 pm
On 1 December 2022, there was an exchange of letters between the Economic Secretary to HM Treasury and the CEOs of the Financial Conduct Authority and Prudential Regulation Authority, regarding operational effectiveness. HM Treasury sent letters to the CEOs of the FCA and PRA highlighting the importance of world-leading levels of regulatory operational effectiveness. The letters also asked for an update on the FCA’s and PRA’s plans to increase transparency on their efforts to be world-leading in terms of operational effectiveness. In response the FCA and PRA have set out their plans to publish more frequent and more detailed data on the regulators’ operational performance.
Author: Simon Lovegrove (UK)
Posted: December 2, 2022, 4:54 pm
On 2 December 2022, the FCA published Consultation Paper 22/26: Quarterly Consultation No 38 (CP22/26). In CP22/26 the FCA consults on various miscellaneous amendments to the FCA Handbook which would: Make changes to the Training and Competence sourcebook. Make changes to remove all derivative products referencing USD LIBOR from the derivatives trading obligation. Move the Finalised Guidance on the FCA’s registration function under the Co-operative and Community Benefit Societies Act 2014 from its position as a static document on the website into the FCA Handbook Make changes to the Glossary of definitions, SYSC, COND, MIFIDPRU, IPRU-INV and SUP. Make consequential changes to chapter 19 of the Enforcement Guide which reflect the Money Laundering and Terrorist Financing (Amendment) (No. 2) Regulations 2022. Make changes to the rules in the Product Governance sourcebook to disapply certain requirements where products are available for distribution to customers resident…
Author: Simon Lovegrove (UK)
Posted: December 2, 2022, 4:53 pm
On 2 December 2022, the European Commission announced that it welcomed the provisional political agreement reached between the European Parliament and the Council on the proposed revised Consumer Credit Directive. The European Parliament and the Council now need to formally adopt the political agreement.
Author: Matthew Gregory (UK)
Posted: December 2, 2022, 4:51 pm
On 1 December 2022, the Financial Markets Law Committee (FMLC) published their response to the FCA’s consultation proposing new guidance on the regulatory perimeter for trading venues (Consultation Paper 22/18). In its response the FMLC highlights that the wording in the Consultation Paper creates uncertainty as regards the market’s current understanding that the FCA does not have regard to a response (Q&A 25) in the European Securities and Markets Authority’s Q&As on market structures.
Author: Simon Lovegrove (UK)
Posted: December 2, 2022, 4:49 pm
On 1 December 2022, the Wolfsberg Group published Principles for Using Artificial Intelligence and Machine Learning (AI/ML) in Financial Crime Compliance. The Principles are intended to guide financial institutions and their financial crime compliance leaders and risk management teams in identifying and managing the operational and reputational risks that may arise from the use of artificial intelligence and machine learning (AI/ML). The Principles should be operationalised by each financial institution according to a risk based approach dependant on the prevailing and evolving regulatory landscape, as well as on its use of AI/ML against financial crime, and governed accordingly. The Principles consist of five elements that support a financial institution’s responsible use of AI/ML in financial crime compliance applications: Legitimate purpose. Proportionate use. Design and technical expertise. Accountability and oversight. Openness and transparency.
Author: Simon Lovegrove (UK)
Posted: December 2, 2022, 4:48 pm
Blackstone REIT Hit with influx of Redemption requests after Equity Raise Declines  Blackstone REIT (BREIT) reportedly limited redemptions on Thursday after an influx of redemption requests, according to an article in Business Today. Blackstone Inc.’s shares traded down 7.1% on the news.  Blackstone reportedly told investors in a letter it would limit withdrawals after it received redemption requests in November greater than 2% of its monthly net asset value and 5% of its quarterly net asset value. As a result, the REIT allowed investors to redeem $1.3 billion in November, equivalent to approximately 43% of investors’ redemption requests.  Many BREIT investors are concerned that Blackstone has been slow to adjust the REIT’s valuation compared to publicly traded REITs that have taken a hit amid rising interest rates, according to the article in Business Today. Rising interest rates have an effect on real estate values by making financing…
Author: The White Law Group
Posted: December 2, 2022, 4:24 pm
Not to brag, but I currently hold the honor of “most favorite person in the world” with my almost-three-year-old. I’m soaking it up because I know this glory will be fleeting. With our two older kids, I’ve already been edged out by the iPad, other hobbies, and school buddies. As every parent knows, it’s fun to see our kids start to spread their wings, but also a little sad to let them go. After a lot of soul-searching, I have come to realize that I only get one chance at this life, and I don’t want to spend all of it behind a computer screen – as fun as that’s been! The moment has come for me to put more energy toward my family, friends and in-person happenings. For those reasons, I am doing something I have never done before: stepping back – or at least, sideways – from a career opportunity. I am certainly not the first to make this decision, but boy has it been a tough one! Our intrepid Senior Editor, John Jenkins,…
Author: Liz Dunshee
Posted: December 2, 2022, 11:30 am
“You get out of it what you put into it,” is what my track coach always said when we asked if we were in for an easy practice. What a guilt trip! But it worked – we almost always won – and it’s stuck with me. I care – maybe too much? – about these sites, everyone who uses them and the results that we deliver to our shareholders, which means it’s very difficult for me to set aside work on nights and weekends. It feels like there is always more to be done! Building on the incredible foundation provided by Jesse Brill and Broc Romanek, these efforts have resulted in a lot of “wins” that have been very rewarding. During the past year, the team here has: – Increased our event attendance, memberships, and blog followers – Launched and the 1st Annual Practical ESG Conference – Delivered practical guidance on cutting-edge issues via numerous webcasts & special events – e.g., our…
Author: Liz Dunshee
Posted: December 2, 2022, 11:15 am
I am very pleased with our business results, but the most rewarding part of this job, by far, has been the relationships that have come with it. I can’t really put into words how much I’ve learned from all of you, and how much I’ve appreciated your willingness to contribute to this community. Whether it’s by speaking on webcasts and at events, recording podcasts, writing articles, participating in our Q&A forums, sending tips and notes in response to the blogs, making suggestions for the sites – every interaction has been valuable. I had very big shoes to fill when I took over the lead editorial position from Broc three years ago, and you all stepped up to continue to make these sites and events exceptional. The caliber of our speakers and contributors provides a one-of-a-kind learning experience on corporate & securities law issues, yes. But it also reinforces the value of “giving back,” and has often left me star-struck!…
Author: Liz Dunshee
Posted: December 2, 2022, 11:02 am
A recent blog from Weil’s Glenn West reviews a pair of Delaware decisions in which non-reliance, exclusive remedy & non-recourse clauses intended to sharply curtail a plaintiff’s ability to bring fraud claims in connection with an acquisition agreement were at issue.  He concludes that despite rather clear guidance from the Delaware courts, these cases suggest […]
Author: John Jenkins
Posted: December 2, 2022, 11:00 am
On 30 November 2022, the European Systemic Risk Board (ESRB) announced the adverse scenario for the European Securities and Markets Authority’s (ESMA) money market fund (MMF) stress testing guidelines in 2022. ESMA, in cooperation with the ESRB are required by legislation to conduct stress tests to assess the resilience of financial institutions or market participants to adverse market developments. As part of this cooperation, the ESRB designs scenarios involving adverse economic and financial market developments. ESMA has updated guidelines for managers of money market funds who are required to conduct internal stress tests and report the results to the national competent authorities and ESMA. For this purpose, the ESRB, in collaboration with the European Central Bank (ECB) and ESMA has updated the stress parameters for the 2022 ESMA MMF guidelines. The scenario was approved by the ESRB General Board on 26 October and transmitted to ESMA on 4 November 2022.
Author: Simon Lovegrove (UK)
Posted: December 2, 2022, 10:44 am
On 30 November 2022, HM Treasury published the Central Counterparties (CCPs) (Transitional Provision) (Extension and Amendment) Regulations 2022. The Regulations extend the temporary recognition regime (TRR) for overseas central counterparties (CCPs) by 12 months, so that the expiry date is pushed back until 31 December 2024. This will allow overseas CCPs, currently in the regime, to continue to offer clearing services in the UK whilst they wait for their applications for recognition to be determined by the Bank of England (BoE). It also extends the transitional regime for qualifying CCPs (QCCPs) contained within the Capital Requirements Regulation (CRR) for an additional 12 months. The expiry date of this transitional regime differs between individual CCPs as it is dependent on when a firm has applied for recognition in the UK. However, for most firms within the regime, the expiry date currently falls on 31 December 2022. The QCCP transitional regime ensures that UK firms with…
Author: Simon Lovegrove (UK)
Posted: December 2, 2022, 10:40 am
On 31 November 2022, HM Treasury published the Financial Services and Markets Act 2000 (Qualifying Provisions) (Amendments) Order 2022. This Order makes amendments to the Financial Services and Markets Act 2000 (Qualifying Provisions) Order 2013 (QUPO) which identifies provisions of EU law which are specified as qualifying provisions for the purposes of various provisions in the Financial Services and Markets Act 2000 (FSMA). The purpose of this Order is to specify rules made under the Regulation on Packaged Retail Investment Products (PRIIPs Regulation), the Markets in Financial Instruments Regulation (MiFIR) and the European Market Infrastructure Regulation (EMIR) as qualifying provisions for the purposes of various provisions in FSMA. The amendments establish a definition for MiFIR and enable the appropriate regulator to take enforcement action for breaches of requirements established by rules under the PRIIPs Regulation, MiFIR and EMIR.
Author: Simon Lovegrove (UK)
Posted: December 2, 2022, 10:38 am
On 30 November 2022, the FCA published a statement made by the Pensions Regulator, the Central Bank of Ireland and the Commission de Surveillance du Secteur Financier on the resilience of Liability Driven Investment (LDI) portfolios and the operational governance of pensions schemes using LDI strategies. The statement sets forth that, the FCA expects asset managers to take necessary or appropriate action following the communication and that they operate their products and services in a way that will not create risks to market integrity or financial stability. Managers of LDI funds should learn lessons from these events to understand and reduce the consequences in tail events. These include operational lessons, the speed with which they are able to rebuild buffers or rebalance funds, client and stakeholder engagement, and reliance on third parties. All market participants should factor recent market conditions into their risk management, and should adopt a wider horizon of…
Author: Matthew Gregory (UK)
Posted: December 2, 2022, 10:36 am
On 30 November 2022, the European Securities and Markets Authority (ESMA)published a final report on guidelines on stress test scenarios under the Money Market Funds Regulation (MMF Regulation). Article 28 of the MMF Regulation provides that ESMA shall develop guidelines with a view to establishing common reference parameters of the stress test scenarios to be included in the stress tests that MMFs or managers of MMFs are required to conduct. This final report includes updated guidelines on specifications on the type of stress tests and their calibration, so that managers of MMFs have the information needed to fill in the corresponding fields in the reporting template mentioned in Article 37 of the MMF Regulation. MMFs and managers of MMFs are expected to measure the impact of the common reference stress test scenarios specified in the guidelines. On the basis of these measurements, they are expected to fill in the reporting template referred to in Article 37 of the MMF…
Author: Simon Lovegrove (UK)
Posted: December 2, 2022, 10:35 am

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    Mark J. Astarita, Esq. is a securities lawyer who represents investors, financial professionals and firms in litigation, arbitration and regulatory matters across the country. He is a partner in the national securities law firm of Sallah Astarita & Cox, LLC and can be reached by email at or by phone at 212-509-6544.

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