Posts from September 2014.
In my last blog post on interpleader actions, we explored the benefits a financial services firm can obtain from filing an interpleader action. An interpleader action protects the holder of assets (such as a bank account, brokerage account or life insurance policy proceeds) when there is a dispute between two or more parties claiming ownership. The holder, or stakeholder, can file an interpleader action to deposit the assets (the "res") into court to allow the competing claimants to litigate over the ownership of the property, allowing the stakeholder to be discharged from further ...
The Financial Industry Regulatory Authority ("FINRA") recently filed a proposal with the Securities and Exchange Commission ("SEC") to amend FINRA's rule governing member firms' background investigations into associated persons applying for registration with the firm. Specifically, the proposed rule clarifies the current investigation procedures contained in FINRA Rule 3110(e) and adds a provision requiring member firms to adopt written procedures designed to verify the accuracy of the disclosures contained in an applicant's Uniform Application for Securities ...
Posted in: FINRA, SEC
On August 21, 2014, the United States Department of Justice announced a record 16.65 billion dollar agreement to resolve civil claims alleged against Bank of America for improperly concealing the risks of mortgage-related securities when it sold them to large institutional investors before and after the 2008 financial meltdown. Separate governmental entities announced unrelated settlements with Goldman Sachs and Standard Chartered Bank, while the Justice Department announced a 13 billion dollar settlement with JP Morgan Chase and a 7 billion dollar settlement with ...
Posted in: DPA

The Second Circuit stayed its mandate last week to allow public-pension litigants to file cert petitions seeking review of its August holding that a subsequent account-agreement forum-selection clause requiring federal-court litigation trumps FINRA's rules requiring all member firms to arbitrate on a customer's request. Goldman, Sachs & Co., v. Golden Empire Schools Financing Auth., Nos. 13-797-cv, 13-2247-cv (2nd Cir. Aug. 21, 2014), here. We discussed the opinion here. The public-pension litigants argued three grounds for the stay. First, they wrote the Second Circuit's ...

Posted in: FINRA

FINRA celebrated its 75th Anniversary this September 18. It is the "largest independent regulator for all securities firms doing business in the United States," with a notionally voluntary membership of over 4,100 securities firms. Its mission is protecting investors, and FINRA is the primary cop on the beat, policing over 634,000 registered securities representatives. FINRA employs 3,400 people in 20 offices. It monitors 6 billion share trades a day and fined Wall Street over $74 million last year. Read the release here. FINRA is a voluntary membership organization you have to ...

Posted in: FINRA
The Financial Industry Regulatory Authority (FINRA) announced on Wednesday that it intends to discuss potential rule-making initiatives that would seek to increase the transparency of Alternative Trading Systems, including "dark pool" trading among brokers. FINRA will discuss the proposed rules on September 19th. Alternative Trading Systems, or ATS, consist of regulated fora for matching buyers and sellers for trades that do not occur within an exchange. The name "dark pool" derives from the non-public nature of some of these systems, whereby certain trades occur with little ...
Posted in: FINRA
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