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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 all 2021, 2022, and YTD 2023 back issues of the Alert can be downloaded free of charge here.)

PRESIDENT BIDEN SIGNS SPEAK OUT ACT. BARS ENFORCEMENT OF PREDISPUTE NONDISCLOSURE OR NONDISPARAGEMENT CLAUSES IN SEXUAL ASSAULT OR HARASSMENT DISPUTES. The President has signed into law a new statute barring enforcement of predispute nondisclosure or nondisparagement clauses in disputes involving sexual assault or harassment. READ MORE

EXPUNGEMENT UPDATE: FEW COMMENTS ON AMENDED PROPOSAL. PIABA AND NASAA SUPPORTIVE, BUT SIFMA URGES DISAPPROVAL. The comment period closed December 7 on FINRA’s proposed changes to its expungement rule filing. We offer an analysis of the few institutional comments. READ MORE

THINK THE “RIGGED PANELS” CASE IS DONE? THINK AGAIN. Those who thought this one was finished need to rethink their assumptions, as an appeal has been filed with the Georgia Supreme Court. 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 factfinder, 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 all 2021, 2022, and TYD 2023 back issues of the Alert can be downloaded free of charge here.)

Evan K. Halperin Revocable Living Trust v. Charles Schwab & Co. Inc., No. 21-cv-8098 (S.D.N.Y. Sep. 19, 2022): A federal court rejected the contention of an unsuccessful customer claimant that a FINRA arbitration panel’s failure to compel the respondent broker-dealer to produce evidence amounted to “refusing to hear evidence” and “evident partiality.” READ MORE

Lotz v. CFD Investments and Vietor, FINRA ID No. 21-01564 (Des Moines, IA, Nov. 28, 2022): As widely reported in the media, a former CFD Investments money manager has been ordered to reimburse several former clients to the tune of nearly $6 million. READ MORE

Nowak v. Morgan Stanley, FINRA ID No. 21-02127 (Tampa, FL, Nov. 2, 2022): As widely reported in the media, Morgan Stanley has been ordered to pay two investors over $11 million arising out of use of a covered call strategy. READ MORE

HEARD THROUGH THE REGULATORY GRAPEVINE, COMMENT LETTERS, & SPEECHES

Contributor: SEC-Hollie Mason (Hollie.Mason@kroll.com)

FINRA-Jerry DeNigris (jdenigris@riversidefinancial.com)

(ed: Keeping abreast of rulemaking and other regulatory initiatives can be a full-time job. 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.)

Rule 10b5-1 Amended: The SEC has amended Rule 10b5-1 of the Securities Exchange Act of 1934 (Exchange Act) and adopted new disclosure requirements related to trading by public company insiders. SEC.gov | SEC Adopts Amendments to Modernize Rule 10b5-1 Insider Trading Plans and Related Disclosures

Ooki DAO case opens the door for SEC action: Federal court ruling in Ooki DAO case opens the door for SEC action against decentralized autonomous organizations trading in digital assets. In September 2022, the Commodity Futures Trading Commission (CFTC) filed a complaint in federal district court in San Francisco against Ooki DAO, a decentralized autonomous organization (DAO), alleging violations of the Commodity Exchange Act (CEA) and CFTC Regulations. 

New SEC rule proposals on Order and Execution procedures: On December 14, 2022, the U.S. Securities and Exchange Commission proposed a package of inter-connected rule proposals (the “Proposals”) that, if adopted, would drastically rewire order handling for NMS securities, upend established equity market structure, and impose heightened and more complex best execution obligations upon market participants for all types and asset classes of securities. SEC.gov | SEC Proposed Rules  

"FINRA Expands Enforcement Priorities for 2023" Read the AdvisorHub article

Contributors: Rotating Practice Management Committee Members

(ed: In response to survey requests, we have added a new column to provide quick and helpful tips from seasoned experts relating to operating a successful expert practice.)

by SER Member Patrick M. Dennis (patrick.dennis@oysterllc.com)

One of the things I have found very helpful since I started doing expert witness work is using an accounting system such as QuickBooks or similar products. QuickBooks helps me with the myriad of accounting issues that arise. The system tracks revenue, expenses, creates invoices, and tracks payments. I think I would be totally lost without it.

I also use QuickBooks Time to track my billable hours on each engagement. Through an app on my phone, I can log in each time I start work on anything connected to the engagement. This timekeeping is linked to my QuickBooks account and pulls entries from my timesheets to create my client invoices.

Early on I opted to upgrade my QuickBooks subscription to include the Live Bookkeeper function. This allows me to have calls with a live bookkeeper and work through various issues from time to time. Through screen sharing we can work on profit and loss reports, non-billable expenses and other tax deductible entries including home office expenses such as internet, phone, utilities and square footage. I work with my bookkeeper on a regular basis (weekly or more often when a lot is going on).

One of the driving forces in subscribing to a bookkeeping system is to make sure that my books are in shape to send to my accountant at tax time. My QuickBooks system is linked to my company bank account and company credit card allowing it to find and track my business expenses.

The time and effort that the system saves me is well worth the expense. The frustration the accounting system saves this non-accountant is probably well worth the cost alone.

Contributor: Patti Koetting (pkoetting@gmail.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.)

JANUARY BOARD MEETING: SER's Board of Directors will meet for their regular winter meeting on Saturday January 21st. The Board meets twice annually, once in January and once mid-year, usually in combination with the Annual Conference. Historically, Directors have met in person in January, traveling to centrally located Dallas, at their own expense. This will be the third year that Board is meeting via Zoom. While Directors miss the in-person experience, the remote meeting does save the organization money.

In addition to reviewing the financial status of the organization (previous year's Financials and approving a budget for the new year), the Board hears from each of the established Committees. Committee Chairs report on their past progress and their expectations for this year. Directors encourage all members to reach out any time with suggestions on how we can improve the membership experience. If you are interested in participating on a committee, please reach out to any Director, Committee Chair or Controller Patricia Koetting (pkoetting@gmail.com).

Contributor: Patti Koetting (pkoetting@gmail.com)

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 2023 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.

Mission Statement: SER provides continuing professional education and promotes ethics and integrity among its members while remaining dispute neutral as an organization.

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.