Financial Regulatory Report

Updates and insights on issues in financial services regulation, compliance, enforcement and litigation

Latest from Financial Regulatory Report - Page 2

On January 30, 2018, dissatisfied crypto token purchasers filed a class action lawsuit against Paragon Coin, Inc. (“Paragon”) and founders Jessica VerSteeg and Egor Lavrov, alleging that the Paragon initial coin offering (“ICO”) violated the federal securities laws.[1]  This lawsuit follows those filed by plaintiffs against Centra, Tezos, ATBCoin, BitConnect, and Xunlei in connection with their ICOs in recent months.  One of the more high profile class action defendants is BitConnect, which is…
The U.S. Securities and Exchange Commission (“SEC”) is continuing to increase its scrutiny of companies that might be taking advantage of investor excitement for blockchain and cryptocurrency (ICO) deals to inflate their share prices and raise funds.  On January 8, 2018, the SEC suspended trading in the securities of Hong Kong-based UBI Blockchain Internet, Ltd. (“UBI Blockchain”) through at least January 22, 2018.  This action follows the SEC’s suspension of trading in the securities of…
On November 13, 2017, Senate Banking Committee Chairman Mike Crapo, along with several Democratic senators, announced an agreement on bipartisan financial reform legislation. The proposed legislation aims to lower the number of banks considered “systemically important” and thus subject to enhanced bank supervision rules.  The legislation also contains provisions aimed at easing the regulatory burdens of small, midsize, and community banks.…
Nine years after Satoshi Nakamoto circulated his whitepaper and introduced the world to bitcoin, regulated bitcoin derivatives are about to be introduced in the United States. CME Group recently announced that it will begin to offer bitcoin futures based on the CME CF Bitcoin Reference Rate later this year[1] and the Chicago Board Options Exchange has announced it will begin listing bitcoin futures contracts in Q1 2018.[2]  Ahead of any futures contract…
On 3 November 2017, the German regulator for the financial sector, the Federal Financial Supervisory Authority (“BaFin”), published a new circular titled Rundschreiben 10/2017 (BA) vom 3. November 2017 – Bankaufsichtliche Anforderungen an die IT (in English: Circular 10/2017 – Regulatory Requirements for IT-Systems – “BAIT”). The BAIT is available in German language at the BaFin’s website. The final version of the BAIT incorporates a number of revisions that result from the submissions made by stakeholders in…
Democrat Phil Murphy has been elected as the next Governor of the State of New Jersey. Murphy comes into the office with a double-digit victory over departing lieutenant governor Kim Guadagno (R), and the backing of a state legislature controlled by Democrats.  Governor-Elect Murphy, who has never served in elected office, promises to take the Garden State in a new direction. Read our full report on our sister site, the Technology Law Dispatch.…
On October 30, 2017, the U.S. Securities and Exchange Commission (“SEC”) filed a complaint in federal court against a day trader for allegedly committing fraud and market manipulation during which the trader utilized a digital currency exchange in a supposed attempt to cover his tracks. The SEC claims that defendant’s associate obtained unauthorized access to other people’s brokerage accounts and caused them to enter unauthorized trade orders at artificial prices.  Many of these orders then…
With Americans’ saving habits in the news as the federal government considers caps on retirement contributions, financial institutions should be aware that many states are passing laws making it easier to incentivize saving. To date, 26 states have enacted legislation that liberalizes their approaches to games of chance in support of good consumer saving practices. Prize-linked savings (PLS) accounts allow consumers that invest in savings accounts or certificates of deposit to be entered into drawings…
On October 18, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) entered  into the long simmering debate over consumer-authorized data sharing.  This debate pits mainstream financial institutions, which are typically reticent to share customer data with third parties, against data aggregators and other fintechs.  Those newer companies provide services directly to consumers—or to enhance the consumer experience—and rely on data from mainstream institutions in order to do so.  Both sides are grappling with complex issues…
Late Tuesday evening the Senate voted to nullify the Consumer Financial Protection Bureau’s (“CFPB” or “Bureau”) controversial Arbitration Agreements Rule (“Rule”).  All but two Senate Republicans supported a resolution to repeal the Rule pursuant to the Congressional Review Act.  While there were rumors that one or two Democrats might also lend their support, none ultimately did so.  The Vice President cast the tie breaking vote. The House of Representatives voted to nullify the Rule in…