Financial Services Observer

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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…
Click here for a comprehensive GT Alert on this topic. On Dec. 20, 2018, the Office of Compliance Inspections and Examinations (OCIE) of the U.S. Securities and Exchange Commission (SEC) issued its annual Examination Priorities for 2019 (Exam Priorities), which is available for download here. The Exam Priorities focus around six thematic areas: (1) Retail Investors, including seniors and those saving for retirement; (2) Registrants responsible for critical market infrastructure; (3) FINRA and MSRB; (4)…
The U.K.’s Criminal Finances Act 2017 provides law enforcement with new powers to obtain orders to freeze bank accounts and apply for forfeiture orders, permanently depriving the account holder of the funds contained in the account. These draconian new powers have received little publicity and contain fewer safeguards than unexplained wealth orders and the civil recovery process under the Proceeds of Crime Act 2002 (POCA), discussed in Parts I and II of this series. The…
Unexplained Wealth Orders (UWOs) extend the powers available to UK law enforcement authorities under the Proceeds of Crime Act 2002 (POCA), enabling investigators to ask people who are holding assets, which based on their legitimate income they would not be able to afford, to prove that such assets were obtained from legitimate sources. If the person can’t prove the assets are from a legitimate source, then the authorities can take steps to recover those assets.…
Effective Sept. 26, 2018, the Securities and Exchange Commission approved amendments to Nasdaq’s shareholder approval rule regarding issuances of 20% or more of an issuer’s outstanding common stock or voting power in a private offering. The amendments are intended to update Nasdaq’s shareholder approval rules from their 1990 adoption and enhance the ability for capital formation without sacrificing investor protections. In short, the amendments eliminate book value as the minimum price for certain permitted offerings,…
On Sept. 30, 2018, Gov. Jerry Brown signed into law Senate Bill No. 826 (SB 826), California’s new legislation promoting gender balance on the boards of directors of publicly held corporations headquartered in California. The legislation is designed to encourage gender diversity in corporate boardrooms, boost the California economy, and improve opportunities for women in the workplace. The new law requires publicly held domestic California corporations and foreign corporations headquartered in California to have a…
Last week, in Pictet Overseas, Inc. v. Helvetia Trust, the Eleventh Circuit U.S. Court of Appeals affirmed a Florida district court’s order permanently enjoining two offshore trusts from pursuing a FINRA arbitration against a FINRA member and its associated person owners. In Pictet, two offshore trusts, Helvetia Trust and AAA Group International Trust, held custodial accounts at a Swiss bank, Banque Pictet, and alleged that they were defrauded into investing in a Ponzi scheme by…
Rule 15c2-12 of the Securities Exchange Act of 1934 (Rule 15c2-12) was adopted by the Securities and Exchange Commission (SEC) in 1989 to establish standards for the procurement and dissemination of disclosure documents by underwriters as a means of enhancing the accuracy and timeliness of disclosure to municipal securities investors. Previous amendments to Rule 15c2-12 incorporated provisions: (1) prohibiting underwriters from purchasing or selling municipal securities in connection with a primary offering unless the issuer…
In a previous GT Alert, we summarized and analyzed the Supreme Court’s June 21, 2018, decision in Lucia v. Securities & Exchange Commission, 138 S. Ct. 2044 (2018). That GT Alert cited the SEC’s 30-day stay of “all administrative proceedings” “before an administrative law judge” and foretold continued uncertainty concerning the status of administrative law judges and their decisions. A subsequent 30-day stay was issued on July 20, 2018, and expired on Aug. 22, 2018.…