Financial Services Observer

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On March 21, 2019, in Whitaker v. Wedbush Securities, an Illinois appellate court for the first time addressed the liability of a futures commission merchant (FCM) or broker-dealer (BD) under Section 4A-105 of the Uniform Commercial Code (UCC). By way of background, a customer of an FCM dually registered as a BD ostensibly requested a series of wire transfers from his commodity trading accounts. Unbeknownst to the FCM, in reality a third-party hacker had…
On March 21, 2019, in Van Dyke v. Jesse White, the Illinois Supreme Court issued a long-awaited opinion relating to Illinois Securities Department authority to regulate annuities under the Illinois Securities Law of 1953 (Act). By way of background, in 2011, the Illinois Securities Department audited Richard Lee Van Dyke following complaints from the adult children of one of his deceased clients. Van Dyke was registered with the Securities Department as an investment advisor…
On April 1, 2019, the SEC provided additional guidance relating to its new rules that permit companies to file redacted material contracts without applying for confidential treatment of the redacted information provided the redacted information (i) is not material and (ii) would be competitively harmful if publicly disclosed. The new rules became effective upon their publication in the Federal Register on April 2, 2019. Primarily located in Regulation S-K Item 601(b), the new rules require…
In 2018 the House of Lords announced it would set up an ad hoc Select Committee to conduct a post-legislative review of the Bribery Act 2010. Greenberg Traurig Shareholder Anne-Marie Ottaway was appointed Specialist Advisor to the Committee, which on 14 March 2019 published the report of its findings. The review confirms that the Bribery Act 2010 is “an exemplary piece of legislation” which sets the global benchmark for anti-bribery and anti-corruption legislation. The…
Departing from its historical practice but following the approach taken by the SEC and FINRA, the Commodity Futures Trading Commission (CFTC) on Feb. 12, 2019, announced its first release of examination priorities for each of its regulatory divisions. In making the announcement, CFTC Chairman J. Christopher Giancarlo indicated the release is part of CFTC’s “initiative to improve the relationship between the Agency and the entities it regulates, while promoting a culture of compliance at our…
2018 was a year of transformation for the blockchain industry. While the market continued to see technological advancements in smart contracts, platform functionality, scalability and security, regulators took a firmer rein in pursuing those seeking to exploit the uninitiated or those engaged in outright fraud. In this issue of Greenberg Traurig’s Blockchain & Cryptocurrency Newsletter, we discuss some of the key enforcement actions and proceedings during 2018 that have shaped the regulatory environment in the…
Colorado recently passed legislation that will facilitate the sale and transfer of digital tokens in Colorado. Under the Digital Token Act, Colorado businesses will be permitted to effect transactions involving the sale and transfer between certain persons of digital tokens secured through a decentralized ledger or database, with a focus on the production, distribution, and consumption of goods (also known as a “cryptoeconomic system”), as opposed to the current centralized internet platforms and applications that…
One of the consequences of a “no-deal” Brexit would be that the United Kingdom would no longer have access to the European financial market. This would affect LIBOR as a trusted and widely used benchmark. LIBOR vs. EURIBOR Currently, two relevant benchmarks exist in the European Union: LIBOR and EURIBOR. LIBOR stands for “London Interbank Offered Rate” and is a benchmark that is used for – among other things – loans based on Loan Market…
On Feb. 7, 2019, the UK’s National Crime Agency (NCA) confirmed that it had obtained account forfeiture orders over money held in bank accounts in the name of the former Moldovan prime minister’s son, Vlad Luca Filat. Part III of our ‘Prove It or Lose It’ series anticipated the use of UK law enforcement authorities’ draconian new powers to obtain orders to freeze bank accounts and to apply for the forfeiture of money held in…
On Jan. 22, 2019, the Financial Industry Regulatory Authority (FINRA) released its 14th Annual Risk Monitoring and Examination Priorities Letter, where it identifies its areas of examination focus for 2019. The FINRA president’s cover note points out the addition to the title of a reference to “risk monitoring.” While the Priority Letter describes the multiple issues and concerns on which FINRA will continue to focus during examinations, the president’s note points out that this…