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Contributor: George H. Friedman (George@SecArbAlert.com)

(ed: This column follows recent items of interest to securities experts and relating to arbitration practice. These items are drawn from recent editions of the Securities Arbitration Alert (updated where necessary) and appear here with the permission of the Alert’s publisher. This issue’s column is compiled by the SAA’s publisher and Editor-in-Chief, George H. Friedman. Note that any 2021 back issues of the Alert referenced below can be downloaded free of charge here.)

FOLLOWING PIABA, NASAA PROPOSES MODEL RULES TO ADDRESS UNPAID AWARDS AND FINES. The North American Securities Administrators Association (“NASAA”) has released for public comment draft model rules to address the lingering problem of unpaid fines and arbitration awards. READ MORE

FINRA DRS POSTS STATS THROUGH 3Q: CUSTOMER ARBITRATION CLAIMS ARE DOWN A BIT, WHILE INDUSTRY ARBITRATIONS CONTINUE TO CRASH. AND MEDIATION FILINGS ARE MOST DEFINITELY STAGING A COMEBACK. FINRA Dispute Resolution Services (“DRS”) posted case statistics through the end of the third quarter, with the overall arbitration case filing trends basically continuing from prior months but with a confirmed change in mediation stats. READ MORE

FINRA DISPUTE RESOLUTION SERVICES: “GET VACCINATED OR PARTICIPATE VIRTUALLY (EXCEPT IN FLORIDA).” FINRA Dispute Resolution Services (“DRS”) on September 17 announced an updated COVID-19 vaccination policy.  READ MORE

JOINING VIRGINIA, OHIO IS THE LATEST STATE TO TAKE ON MANDATORY INVESTMENT ADVISER ARBITRATION. FAA PREEMPTION BATTLE NEXT? September 30 ushered in the effectiveness of amendments to Ohio’s Administrative Code impacting investment advisers.  READ MORE

Contributor: George H. Friedman (George@SecArbAlert.com)

(ed: By reading how courts and arbitrators value, view and utilize testifying experts or decide issues experts encounter on a regular basis, one can better serve the fact-finder, more effectively help the client, and more likely avoid a bad experience. For selected court decisions, we draw again from the Securities Arbitration Alert (SAA), and other resources. Note that any 2021 back issues of the Alert referenced below can be downloaded free of charge here.)

Servotronics, Inc. v. Rolls-Royce PLC and the Boeing Company, No. 20-794 (SCOTUS). We reported in SAA 2021-34 (Sep. 9) that, just a month out from the scheduled October 5 oral argument, Servotronics had notified the Supreme Court that it was dismissing its Petition for Certiorari in Servotronics, Inc. v. Rolls-Royce PLC and the Boeing Company, No. 20-794.  READ MORE

Badgerow v. Walters, No. 20-1143 (SCOTUS). The only arbitration-centric case on the Supreme Court’s oral argument was heard onNovember 2. It involved a FINRA award. READ MORE

In re Lerner v. Credit Suisse Securities (USA) LLC, No. 2020-03381 & 2020-05002N (N.Y. App. Div., 1st Dept. Apr.29, 2021). A FINRA panel manifestly disregarded the law when it deemed deferred compensation “wages” under New York law. Its award of interest at less than the statutory rate was acceptable, however. READ MORE

Joyce E. Cagle IRA et al v. Pershing LLC, FINRA ID Nos. 20-00922 and 20-03862 (Dallas, TX, Jul. 8, 2021). The Stanford Ponzi scheme was discovered in early 2009. Arbitration cases arising out of it are still with us, however. READ MORE

HEARD THROUGH THE REGULATORY GRAPEVINE, COMMENT LETTERS, & SPEECHES

Contributors: SEC-Hollie Mason (hollie.mason@brattle.com) and FINRA-Jerry DeNigris (jdenigris@riversidefinancial.com)

(ed: Keeping abreast of rulemaking and other regulatory initiatives can be a full-time job. We include a few recent changes in rulemaking, legislation, regulatory notices and policy speeches that are creating "buzz" in the securities community. This compilation is a summary of regulatory actions and comments and is not meant to be an all-inclusive substitute for individual research via the various regulatory sites.)

On April 9, 2021, the SEC’s Division of Examinations (OCIE) released a risk alert (the “Alert”) highlighting observations from offering environmental, social, and governance (“ESG”) -related investment products and services.  The Alert, is part of a number of recent SEC activity regarding ESG-related investment products that appear to be in response to investor demand for such products.

On October 12, the Fifth Circuit’s Appellate Court affirmed a district court’s decisions in SEC v. Blackburn, awarding disgorgement to alleged victims of a penny stock fraud scheme subject to an SEC enforcement action. The decision signifies the first time that a circuit court has interpreted the new standard by which the SEC may seek disgorgement under the Supreme Court’s Liu v. SEC decision. https://www.sec.gov/litigation/litreleases/2014/lr23158.htm

Zoom Arbitration One Year Later: Lessons Learned, Tips for Practitioners and the Road Ahead Podcast: FINRA Unscripted Ep83: Featuring Richard Berry, Executive Vice President of FINRA’s Dispute Resolution Services, Sam Edwards, a partner with the securities litigation and arbitration law firm Shepherd, Smith, Edwards and Kantas, and Beverly Jo Slaughter, senior managing counsel with Wells Fargo’s Wealth Investment Management Litigation group.

Contributor: Geraldine Genco "GG" Dube (GGenco@GGencoAssociates.com)

(ed: SER’s Committees are composed of two Board Members, and most have one or more members at large. Our Committees and members are listed under the “About Us” button on our Home Page. Committees either support the business needs of our organization or aim to develop and enhance the skills and expertise of our members.)

Contributor: Patti Koetting (pk@pkoetting.com)

Latest Updates to Reg D Exemption Rules (2020-2021) SER member Richard Leisner provides an updated chart on the most recent changes to the operative provisions of Reg D and other popular alternatives to formal securities registration. Richie is a Senior Member of Trenam Law in Tampa Florida. READ MORE

Payment for Order Flow (PFOF) and Gamification Podcast. SER Member Hollie M. Mason, Esq. discusses Payment for Order Flow (PFOF) and Gamification on a Q&A podcast with Carlton Fields Shareholder and former FINRA Senior Director Justin Chretien, Esq. READ MORE

SER Member Presents to ACFE and Missouri Society of CPAs Conferences. SER Member Robert Jones, recently presented on “Detecting & Investigating Stockbroker Fraud” at the Annual Global Fraud Conference for the Association of Certified Fraud Examiners and the Missouri Society of CPA’s Fraud & Forensic Accounting Conference. READ MORE

Contributor: Patti Koetting (pk@pkoetting.com)

(Registration will open in the Spring.)

Final Note: The Contributors are members of the SER Public Relations Committee. They have designed this newsletter for the membership and worked to gather material for this issue. Members can help by sending Contributors information and suggestions for content in future issues. Members should also visit SER's "Newsroom" section of the Website periodically, as many of the items that appear here will be first posted in the Newsroom.

Copyright 2021 Securities Experts Roundtable - publication appears three times a year and is available as a membership benefit to experts of the Securities Experts Roundtable. Comments - suggestions welcome. Email Newsroom@securitiesexperts.org with comments.

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Disclaimer: This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. The publisher is not engaged in rendering legal, accounting or other professional service or advice. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.