Securities Law Related Blogs

Brent StevensIn the following guest post, Brent Stevens analyzes and summarizes the findings from the 2024 Claims Litigation Management Defense Counsel Study. Brent is a Senior Director at Consilio and leads Consilio’s Insurance Vertical, serving Consilio’s Insurance Industry clients, including carriers, brokers, and their law firms. I would like to thank Brent for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to the site’s readers. Please contact me directly if you would like to submit a guest post. Here is Brent’s article. ************************** The 2024 Claim Litigation Management (CLM hereafter) Defense Counsel Study offers a wealth of insights into the evolving dynamics of our industry.  The study is an annual “State of the Union” report, this year reflecting a survey of 375 defense attorneys.  In the wake of…

FINRA’s Guidelines on AI, FINRA Updates Guidance on ChatBots, Communications   Artificial intelligence (AI) technology is revolutionizing the way financial firms communicate with clients and investors. From chatbots to automated reports, AI is increasingly being used to generate communications that are efficient, personalized, and tailored to individual needs. However, with this innovation comes the responsibility of ensuring compliance with regulatory standards.  AI Applications in the Securities Industry  According to the Financial Industry Regulatory Authority (FINRA), the proliferation of AI-based applications in the securities industry is evident across three broad areas:  Communications with Customers: Firms are using AI to enhance customer experience and outreach targeting through virtual assistants and email screening applications. These AI-driven tools enable firms to provide personalized responses to customer inquiries and deliver curated…

On 16 May 2024, the Financial Conduct Authority (FCA) published six ‘Dear CEO’ letters, setting out information to support firms in their final preparations for implementing the Consumer Duty for closed products and services. This is ahead of the implementation deadline on 31 July 2024. The letters are addressed to the CEOs or Directors of:  Retail banking firms Life insurance firms Consumer finance firms Consumer investment firms Asset management firms All other firms The letters set out: The application of the Duty to closed products and services. Priority issues that are particularly acute or widespread in closed products and services. Action prompts to ensure firms are prepared for the 31 July 2024 deadline for closed products and services. These set out more specific objectives, tailored to the type of firm the letter addresses.  (The FCA reminds firms that its website gives examples of good and poor practices for open…

On 16 May 2024, the Business Banking Resolution Service (BBRS) published its Annual Report, for the year ended 31 December 2023. The BBRS is a non-profit organisation set up to resolve disputes between eligible small and medium-sized businesses and participating banks. It was established in response to the commitments made by the banking and finance industry following the Simon Walker Review. It flagged up the need for an independent service to resolve eligible historical and current complaints for small and medium sized businesses that have not previously had access to independent review. The Annual Report constitutes an overview of the BBRS’ case data, key financial performance indicators and a strategic update. The Annual Report includes: Reports from the Chair, CEO, Chief Adjudicator, Directors and Independent Auditor. Strategic Report. Customer Testimonials. Financial Statements, Balance Sheets, Statement of Cash Flows and Statement of…

On 16 May 2024, the Department for Business & Trade published a document, Framework and Terms of Reference for the Development of UK Sustainability Reporting Standards. In March 2023, the Government published Mobilising green investment: 2023 green finance strategy. In this document the Government committed to establishing a framework to assess and decide whether to endorse IFRS Sustainability Disclosure Standards for use within a UK context. In this latest document the Government explains that endorsement process in more detail, and its associated roles and responsibilities together with the UK regulators, standard-setters and advisory committees. In addition, the document explains how the Government, FCA and other parties will work together to co-ordinate future decisions to implement UK Sustainability Reporting Standards.

On 16 May 2024, the Government published Sustainability Disclosure Requirements: Implementation Update 2024. The document discusses timings for the following components of the UK’s sustainability disclosure requirements: IFRS Sustainability Disclosure Standards: The Government aims to make the UK-endorsed ISSB standards available in Q1 2025. The endorsement process will assess the standards and, subject to a positive endorsement decision, will conclude with the publication of UK-endorsed standards. These will be known as UK Sustainability Reporting Standards. Subject to a positive endorsement decision by the Government, and following a consultation process, the FCA will be able to use the UK Sustainability Reporting Standards to introduce requirements for UK-listed companies to report sustainability-related information. Subject to a positive endorsement decision, the Government will also decide on disclosure requirements against UK Sustainability Reporting Standards…

On 16 May 2024, the Network for Greening the Financial System (NGFS) published a cover report and two technical documents on Sustainable and Responsible Investment (SRI) for Central Banks. The cover report reviews SRI in central banks’ portfolio management, with practices and recommendations. It puts forward ten recommendations for central banks to deepen their understanding of SRI policies and improve their SRI practices. These are based on a step-by-step approach (Measure, Act and Evaluate), inspired by the climate framework of the United Nations Principles for Responsible Investment. A wide variety of case studies is included in the cover report to encourage those central banks that have not yet embraced SRI practices to lever off the experience gained by first movers. Similarly, central banks at the forefront are challenged to further enhance their SRI practices with the aim of meeting the goals of the Paris Agreement. The ten recommendations draw on insights…

On 16 May 2024, the Basel Committee on Banking Supervision (Basel Committee) published a report on the implications of the digitalisation of finance on banks and supervision. The report builds on the Basel Committee’s 2018 paper, Sound practices: implications of fintech developments for banks and bank supervisors and takes stock of recent developments in the digitalisation of finance.  The report considers both the benefits and risks of new technologies and the emergence of new technologically enabled suppliers for the provision of banking services. It identifies eight implications for banks and supervisors relating to macro-structural elements, specific digitalisation themes, and capacity building and coordination. The report further reviews the use of key innovative technologies across various aspects of the banking value chain, including application programming interfaces, artificial intelligence and machine learning, distributed ledger technology and…

By Lene Powell, J.D.A healthy “tone at the top” is crucial for public accounting firms in maintaining culture, professional skepticism, quality control systems, and public responsibility as gatekeepers of U.S. capital markets, SEC Chief Accountant Paul Munter said in a new statement. He encouraged firm leaders to instill an ethical culture by rewarding difficult stands, boosting candor and transparency, and structuring businesses appropriately, among other actions.“[I]t is critical that leaders of public accounting firms lead by example and foster a healthy tone at the top by prioritizing integrity and professionalism over profit and growth,” said Munter.Read the rest of the story and other securities news from Wolters Kluwer at VitalLaw.com.

The Securities and Exchange Commission today announced that Tina Diamantopoulos has been named Director of the Chicago Regional Office, the Commission’s second-largest regional office. Ms. Diamantopoulos is a 30-year veteran of the SEC and has held…Read the Full Press Release Have a securities law question? Call New York Securities Lawyers at 212-509-6544.

Part 1: Risk assessments Many companies are currently considering what steps they need to take in relation to the new UK failure to prevent fraud offence (which is expected to come into force later this year or in early 2025). By way of recap, a company will be liable for failing to prevent fraud by its associated persons (e.g. employees, subsidiaries and third parties) where the fraud (of a prescribed type) is committed for the benefit of the company or its clients. The only defence for the company will be to have in place reasonable procedures to prevent fraud. More details on the new offence, including the underlying fraud offences covered, are set out in our article here. In this blog, we set out some practical guidance informed by our work to date supporting clients in various sectors to prepare for the new offence. This is the first of a series of short blogs explaining the steps companies will need to take to put in place “reasonable procedures”. …

The Securities and Exchange Commission today announced the adoption of amendments to Regulation S-P to modernize and enhance the rules that govern the treatment of consumers’ nonpublic personal information by certain financial institutions. The…Read the Full Press Release Have a securities law question? Call New York Securities Lawyers at 212-509-6544.

The Wall Street Journal editorial board is highlighting today a new report from the Committee to Unleash Prosperity, which indicates a sharp drop-off in institutional investor support for ESG proposals in 2023 as compared to 2022. The Committee to Unleash Prosperity, in case you were wondering, was co-founded by conservative writer Stephen Moore, economist Arthur Laffer, financial news commentator Larry Kudlow and publisher and politician Steve Forbes. The stated mission of the Committee to Unleash Prosperity is “to educate policy makers and the public about government policies that have been proven, in practice, to maximize economic growth and equitable prosperity in America and around the world.” The WSJ editorial board notes that the report indicates some significant retrenchment on the part of large funds with respect to ESG proposals: The news this year is that some of the funds are backtracking. The latest report finds that support for ESG resolutions dropped…

SEC Chief Accountant Paul Munter released one of his insightful statements yesterday on the topic of fostering a healthy “tone at the top” at audit firms, and I think his guidance is applicable to other professional service organizations as well. Munter notes: To be an effective public watchdog, audit-firm leadership must set the right tone at the top by always placing the public-interest obligations of our profession ahead of business interests and profits. Doing so is essential for educating and instilling in our young accountants the critical importance of acting ethically, with integrity and fidelity to the public trust in all our professional activities. These are core tenets of the accounting profession. Munter highlights how tone at the top is particularly important in audit firms, noting: For example, setting a proper tone at the top is critical in supporting auditors’ ability to exercise professional skepticism—having an attitude that includes…

Today on CompensationStandards.com at 2:00 pm Eastern, join us for the webcast – “The Top Compensation Consultants Speak” – to hear Blair Jones of Semler Brossy, Ira Kay of Pay Governance and Jan Koors of Pearl Meyer discuss the latest considerations for compensation committees. The panel will be covering the following topics: – Year 2 of Pay vs. Performance – Incentive Plans – Setting Goals and Considering Adjustments – Trends in Strategic and Operational Metrics – Clawback Policies – What HR Teams and Compensation Committees Are Focusing on Now – Human Capital Management – Recent Considerations and Disclosure Trends – Director Compensation Today Members of CompensationStandards.com are able to attend this critical webcast at no charge. If you’re not yet a member of CompensationStandards.com, subscribe now. If you need assistance, send us an email at info@ccrcorp.com – or call us at…

Last month, the FTC filed an administrative complaint seeking to block Tapestry Inc.’s $8.5 billion proposed acquisition of Capri Holdings. This fight is all about purses, folks, because the FTC says that the deal would eliminate competition between Capri’s Coach & Kate Spade brands and Tapestry’s Michael Kors. The FTC alleges that the deal would […]

 In 2019, the Nevada legislature added a provision to the state's corporate law permitting the articles of incorporation or bylaws to require, to the extent not inconsistent with any applicable jurisdictional requirements and the laws of the United States, that any, all or certain "concurrent jurisdiction actions" and "internal actions" be brought solely or exclusively in specified court(s).  NRS 78.046.  In the case of an "internal action", the specified courts must include at least one Nevada court whereas no such requirement is imposed with respect to a "concurrent jurisdiction action". The statute defines an "internal action" to mean any action, suit or proceeding: Brought in the name or right of the corporation or on its behalf, including, without limitation, any action subject to NRS 41.520; For or based upon any breach of any fiduciary duty owed by any director, officer, employee or agent of…

Derivatives are financial instruments used to shift risks, such as fluctuations in interest rates or foreign exchange rates or changes in the value of assets such as stocks, bonds, metals, or agricultural or energy products.  At first glance, entering into a derivative may appear to involve little more than contract drafting, negotiation, and execution.  After all, each derivative amounts to an agreement providing for contingent payments between the counterparties, which are based on some referenced variable.  In reality, however, entering into a derivative generally involves sophisticated financial market intermediaries that provide services subject to commercial considerations, regulation, market practice, and other constraints shaping the terms of transactions. Derivatives can be classified as either cleared or non-cleared, with the distinction relating to the intermediaries imposing collateral obligations and other credit-risk mitigants.  This post…

Audit firms are private businesses with the same legitimate interest in making a profit that all private businesses have.[1] But audit firms have also been entrusted to be essential gatekeepers in maintaining the integrity of our capital markets. The leaders of audit firms, and the tone that they set, play a central role in ensuring that professionals within audit firms do not sacrifice integrity and professionalism for profit and growth. Picture the following scenario: An issuer’s audit committee solicits competitive bids from audit firms for the company’s independent audit work. In an effort to secure the lucrative engagement, a senior partner at an audit firm secretly promises the issuer’s CFO that if his firm is chosen as the company’s auditor, his firm would provide tax and other permissible non-audit services to the company at reduced rates. The audit firm wins the audit engagement. Following an investigation by the SEC’s Division of…

The White Law Group Files a Claim against National Securities Corp and B. Riley Wealth Management  The White Law Group announces the filing of a FINRA arbitration claim against National Securities Corp and B. Riley Wealth Management for investment losses involving high risk alternative investments.    The firm submitted a claim to FINRA Dispute Resolution on behalf of Georgia resident alleging claims for violation of common law fraud, breach of fiduciary duty, negligence, and negligent supervision.    The claim further alleges that National Securities Corp and B. Riley Wealth failed to supervise unsuitable recommendations in high-risk alternative investments including the following, among others:  Innovation X Holdings QP, LLC – Series 2019-5 Innovation X Sunstone ApartmentsInnovation X Holdings QP, LLC – CFFT IIIInnovation X Holdings QP, LLC – Magic LeapInnovation X Holdings QP, LLC – Series 2018Innovation X…