Philip Arnold

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SEC Overrules Its Own Administrative Law Judge to Clear Customer of Fraud Charges

By Harry Frischer & Philip Arnold on August 25, 2016

In a rare reversal of its own administrative law judge in the Matter of optionsXpress, the full Securities and Exchange Commission unanimously held that the SEC’s Enforcement Division had not met its burden of proof that the customer of a broker-dealer had committed securities fraud in connection with his clearing broker-dealer’s failure to deliver stock as required by Regulation SHO. The customer in this case implemented an option trading strategy which exploited the price…

Corporate Defense and Disputes

Second Circuit Reinforces Liability Standard in Securities Cases Based on Statements of Opinion

By Jonathan Richman, Tanya Dmitronow & Philip Arnold on March 10, 2016

On March 4, 2016, the U.S. Court of Appeals for the Second Circuit reinforced the stringency of the new standard for liability in securities cases arising from allegedly misleading statements of opinion. Construing the Supreme Court’s 2015 Omnicare decision, the Second Circuit held in Gen. Partners Glenn Tongue v. Sanofi Pharmaceuticals, Inc. that a statement of opinion does not become misleading based on allegedly omitted material facts unless the omitted facts conflict with what a…

Corporate Defense and Disputes

CFTC Proposes New Regulations For Algorithmic Trading

By Harry Frischer, Brian Friedman & Philip Arnold on December 8, 2015

On November 24, 2015, the CFTC announced the new proposed Regulation Automated Trading (“Reg. AT”), which contains a variety of measures designed to prevent potential market disruptions arising from algorithmic trading. Among other things, Reg. AT proposes certain pre-trade risk and order management controls, the implementation of policies and procedures governing algorithmic trading, and additional registration and reporting obligations. Many of these proposals were foreshadowed in a recent speech by the CFTC Chair, which we…

Corporate Defense and Disputes

SEC Once Again Sanctions The CCO of An Investment Advisory Firm

By Harry Frischer & Philip Arnold on November 24, 2015

On November 19, 2015, the SEC announced a settlement with investment advisory firm Sands Brothers Asset Management, LLC for violating the Custody Rule, SEC Rule 206(4)-2, which requires that registered investment advisers who have custody of their clients’ assets put in place policies and procedures intended to safeguard those assets against loss, misuse or misappropriation. The SEC also imposed sanctions on Sands Brothers’ Chief Compliance Officer who was subjected to a one-year suspension and a…

Corporate Defense and Disputes

UK Regulators Address Manipulation of Trading Benchmarks and Other Misconduct

By Harry Frischer & Philip Arnold on June 17, 2015

Concluding a year-long review, UK regulators issued the final report of the Fair and Effective Markets Review Committee last week, making a number of recommendations intended to restore confidence in the trading markets for fixed income, currency and commodities (“FICC”) in the wake of past misconduct. The report noted the substantial fines that have been levied in recent years in connection with the attempted manipulation of LIBOR, foreign currency and other trading benchmarks and market…

Corporate Defense and Disputes

FINRA CEO Criticizes DOL Fiduciary Proposal (Again)

By Harry Frischer, David Picon, Philip Arnold & Edward Canter on June 5, 2015

Last week, Richard Ketchum, Chairman and CEO of the Financial Industry Regulatory Authority (“FINRA”), doubled-down on his recent criticism of the U.S. Department of Labor’s (“DOL”) proposed regulation addressing the standard of care for broker-dealers providing retirement investment advice. Speaking at FINRA’s annual conference, Chairman Ketchum said that, while he supports a “best interests of the customer” standard, the DOL’s proposal – which we wrote about here – is “not the appropriate way to…

Corporate Defense and Disputes

FINRA Introduces Revised Sanction Guidelines

By Harry Frischer, Philip Arnold & Daniel Nelson on May 14, 2015

FINRA recently released updated and revised Sanction Guidelines and an accompanying Regulatory Notice that, among other things, call for stricter penalties against broker-dealers who commit fraud or violate suitability rules. The revisions are effective as of May 12, 2015. The Sanction Guidelines, first published in 1993, are intended to assist FINRA’s adjudicators in determining the appropriate disciplinary penalties for violations of the FINRA rules. Rather than provide predetermined or fixed sanctions for particular violations, the…

Corporate Defense and Disputes

Recent Appellate Decisions Limit Access To Customer Assets Held At Foreign Bank Branches

By Harry Frischer, Jessica Fisher & Philip Arnold on October 28, 2014

Originally published as a Proskauer Client Alert. On October 23, 2014, the New York Court of Appeals held for the first time that, under New York law, the “separate entity” rule prevents a court from ordering a foreign bank operating branches in New York from restraining a judgment debtor’s assets held in foreign branches of the bank. Motorola Credit Corp. v. Standard Chartered Bank, No. 162 (N.Y. Oct. 23, 2014). Just over one month ago, and without reference to the…

Corporate Defense and Disputes

Second Circuit Rules That Derivatives Counterparty Is Not A “Customer” of Broker-Dealer Under FINRA Rules

By Harry Frischer, Brian Friedman & Philip Arnold on October 20, 2014

In the recent case Citigroup Global Markets Inc. v. Ghazi Abdullah Abbar, et al., 13 Civ. 2172 (2d Cir. Aug. 1, 2014), the Second Circuit held that, under FINRA rules, an investor who purchased an over-the-counter derivative from a financial institution was not a “customer” of the financial institution’s affiliated broker-dealer, notwithstanding the broker-dealer’s involvement in negotiating and structuring the sale, and with the continued operation of the transaction. As such, the broker-dealer could not…

Philip Arnold

SEC Overrules Its Own Administrative Law Judge to Clear Customer of Fraud Charges

Second Circuit Reinforces Liability Standard in Securities Cases Based on Statements of Opinion

CFTC Proposes New Regulations For Algorithmic Trading

SEC Once Again Sanctions The CCO of An Investment Advisory Firm

UK Regulators Address Manipulation of Trading Benchmarks and Other Misconduct

FINRA CEO Criticizes DOL Fiduciary Proposal (Again)

FINRA Introduces Revised Sanction Guidelines

Recent Appellate Decisions Limit Access To Customer Assets Held At Foreign Bank Branches

Second Circuit Rules That Derivatives Counterparty Is Not A “Customer” of Broker-Dealer Under FINRA Rules

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