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RECENT NEWS FROM THE ARBITRATION FRONT
(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 2021-2024 back issues of the Alert can be downloaded free of charge here.)
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FINRA BOARD MET IN MARCH. APPROVED NEW ARBITRATION RULE. The FINRA Board met last month and approved rule changes codifying the voluntary program accelerating case processing for elderly or seriously ill parties. READ MORE
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NEW DOL FIDUCIARY RULE GOES TO OMB. The Department of Labor’s (“DOL”) proposed fiduciary rule has been finalized and sent to the Office of Management and Budget (“OMB”) for review. We borrow heavily from our previous reporting. READ MORE
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SEC “UN-APPROVES” – SORT OF – FINRA’S CHANGES TO NON-ATTORNEY REP RULE. The SEC has temporarily walked back its January 2024 approval of FINRA’s proposal to amend the non-attorney representation rules. READ MORE
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EXPERT OPINIONS: WHAT ARE THE COURTS (AND ARBITRATORS) THINKING?
(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 2021-2024 back issues of the Alert can be downloaded free of charge here.)
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Kader v. Southern California Medical Center, Inc., No. B326830 (Calif. Ct. App. 2 Jan. 29, 2024). A California appellate court rules that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (“Act” or “EFASASHA”) can be applied retroactively, where the employee’s claim was asserted after the law’s effective date. READ MORE
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Chamber of Commerce of the United States v. Bonta, 62 F.4th 473 (9th Cir. 2023). The parties have stipulated that California’s AB-51 will not be enforced, thus officially ending this saga. READ MORE
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Adams v. US Bancorp, FINRA ID No. 23-02654 (San Francisco, CA, Feb. 22, 2024). In this small claims arbitration, an Arbitrator explains why he has decided to deny a customer's case against Respondents, finding that the customer decided to liquidate her securities in spite of the advice she was given by the registered representative and that her account, in fact, gained money. READ MORE
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HEARD THROUGH THE REGULATORY GRAPEVINE, COMMENT LETTERS, & SPEECHES
(ed: Keeping abreast of rulemaking and 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.)
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Contributor: Hollie Mason (Hollie.Mason@kroll.com)
Adopted Rule: Compliance Date
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The Marketing Rule: Mandatory as of November 4, 2022.
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Form PF Reporting Rules: Partially effective and mandatory as of December 11, 2023, with certain compliance dates in 2024.
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*Private Fund Adviser Rules: Effective as of November 13, 2023; compliance dates vary.
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Amendments to Section 13(d) and 13(g) Reporting Rule: Adopted October 10, 2023; compliance dates vary.
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*Short Sale Disclosure Rule: Adopted October 13, 2023; compliance dates vary.
*These rules are presently being challenged in the Fifth Circuit.
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Charles Bennett (charlesbennett@capitalmmc.com)
SEC effectively expands the scope of Exchange Act definitions of “dealer” and “government securities dealer”: The SEC took additional action that will explicitly affect private fund advisors and proprietary traders. The agency defined the phrase “as part of a regular business” which appears in the statutory definitions of “dealer” and “government securities dealer”. These changes require private fund advisers and proprietary traders “that provide significant liquidity to the markets” to register as BD’s with the SEC and become FINRA members. Entities that were generally thought of as institutional clients will now have to be treated as broker dealers and they will be expected to comply with the panoply of BD regulations. While it is too early to tell, broker dealers that are engaged in underwriting activity will be watching developments to determine how this will affect the book building and distribution process. Release No. 34-99477; File No. S7-12-22, 89 FR 14938, (Feb. 29,2024).
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SEC acts to shorten securities settlement Cycle to T+1 and signals its Intent to move the cycle to T+0: Last year the SEC amended securities settlement processing to provide that ‘regular way settlement” for most transactions will shorten from trade date + 2 to trade date + 1. The compliance date for this change is May 28, 2024. The rule applies directly to registered broker dealers and will also affect trade reporting obligations of investment advisors registered under the Advisers Act of 1940. Interestingly the rule change allows underwriting syndicates to settle with investors on T+2 from T+4. It is unclear if the street will take advantage of the extra day to close with clients. Securities-based swaps are also excluded from moving to T+1. Of even more interest is the SEC’s intention to move towards a further shortening to a T+0 settlement cycle, a move that many fear may adversely affect the market participation of retail clients.
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MEMBER ACHIEVEMENTS - BRINGING CREDIT TO THE PROFESSION
Contributor: Patti Koetting (pk@pkoetting.com) (ed: Whether it’s writing an article, hosting an event, joining a professional committee, or just pursuing a smart practice, we report on member's efforts here. Look to the “Newsroom” section of the SER Website for more frequent, timely reports on our members.)
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SER ACTIVITIES-WHAT'S CIRCLING AT THE ROUNDTABLE?
Contributor: Patti Koetting (pk@pkoetting.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.)
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MEMBER ONLY EVENT: "When & Why Does the Trier of Fact Hit the Off Switch?" SER Past President Ross Tulman, and long-time members Jerry DeNigris and Jack Herrmann,
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hosted an interactive meeting for SER members on March 15th. Panelists shared their best practices while under oath, with a focus on gaining credibility consistently with panels, juries, and judges as well as other times, such as mediations, where an expert is not under oath. READ MORE
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MEMBER WEBCAST: SER's Practice Management Committee hosted a member only webcast on January 18th. "How to Market and Build a Thriving Securities Expert Witness Practice." Committee members include Chair Bob Lawson, Co-Chair Keith Loveland, Mason Dinehart, Jack Herrmann, Jim Karabas and Stuart Rosenthal. READ MORE
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STATISTICS, EVENTS & RESOURCES
Contributor: Patti Koetting (pk@pkoetting.com) (ed: This column seeks to apprise members of events, products and services that can be useful to them in their professional activities. Unless specifically stated, SER does not endorse or sponsor any of the products and services mentioned herein.)
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PLI Global Capital Markets & the U.S. Securities Laws 2024
New York City (and virtual)
April 19, 2024
This program will provide an update on domestic and international regulatory and market developments, bringing together an engaging group of expert practitioners and senior regulators for an in-depth look at how the U.S. securities laws work in the context of a rapidly evolving global regulatory environment.
Registration required.
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SIFMA Anti-Money Laundering & Financial Crimes Conference
New York City
May 6-7, 2024
Join colleagues from across the securities industry at SIFMA’s Anti-Money Laundering & Financial Crimes Conference. Together, we gather with regulatory agencies and law enforcement to discuss current legal and regulatory developments and priorities in the AML and financial crime space.
Registration required.
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2024 FINRA Annual Conference
Washington D.C. (and virtual)
May 14-16, 2024
The conference provides the opportunity for practitioners, peers and regulators to exchange ideas on today’s most timely compliance and regulatory topics - including: regulatory compliance, risk management, crypto asset developments, trends and threats in financial crimes and the evolution of branch office inspections.
Registration required.
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C&L 2024 Regional Seminar
St. Louis
June 4, 2024
C&L Regional Seminars gather compliance and legal professionals working in the financial services industry to share best practices, informative content and focused networking opportunities in the increasingly complex and changing regulatory and compliance arenas.
Registration required.
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Media Stats
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2024:
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LinkedIn Followers @ 1,678 Current followers are securities attorneys and industry contacts. Be sure to follow us and share our Posts to increase our numbers and your visibility!
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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.
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Copyright 2024 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. The views expressed are those of the individual presenters in their individual capacities only and are not necessarily the views of their respective employers or SER. All content is provided “as is” and may not constitute the most up-to-date information and may not be free from errors. SER expressly disclaims any and all liability with respect to actions taken or not taken based on the content of these programs. SER, its officers and directors offer no opinion about the views expressed in these works and assume no responsibility for the accuracy of any representations or factual assertions contained in the works.
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