Posts in Tennessee.

Frank Borger-Gilligan, Tennessee's chief securities regulator, last week was selected as President-Elect of the North American Securities Administrators Association ("NASAA") at the annual meeting in Anchorage, Alaska. Borger-Gilligan will serve as NASAA's president for the 2019-2020 term.

NASAA is the nation's oldest investor protection agency. The North American Securities Administrators Association (NASAA) was organized in 1919, making it the oldest international investor protection agency. NASAA's 67 members are state, provincial, and territorial securities ...

Posted in: Tennessee

The Securities Division of Tennessee's Department of Commerce and Industry has increased its enforcement activity during 2016. The recent actions include:

Final Administrative Orders:
Clifton Alexander and HugeROI.com - May 30, 2016
Anthony Dean Myers, Sr. - May 24, 2016

Cease & Desist Orders:
Broad Street Ventures - August 12, 2016
Cumulus Financial - October 29, 2015

Consent Orders:
Wortham Laboratories - August 12, 2016
Charles Sims, Jr. - August 3, 2016
Scott B. Chitwood - July 21, 2016
The Homes Email Business Corp. - May 23, 2016

Initial Orders:
Black Gold Resources, Inc ...

Posted in: Tennessee

In a recent new release, the Tennessee Securities Division urged investors to ask tough questions of their investment advisors, and about their compensation, account arrangements and educational / regulatory history.

The May 26 release is here.

SEC-registered investment advisors are required to provide the answers to those (and other) questions on their ADV Part 2, which is kept on file with the SEC and publicly-available through the Commission's IA Public Disclosure Portal, here. Information on registered broker-dealers and their associated persons is available through ...

Posted in: FINRA, SEC, Tennessee

The Securities Division of the Tennessee Department of Commerce and Insurance issued a May 2 press release encouraging consumers to report financial-services misconduct to its Financial Services Investigations Unit.

"The FSIU investigates complaints involving allegations of securities and insurance fraud and other violations of the Tennessee Securities and Insurance Acts," said TDCI Assistant Commissioner for Securities Frank Borger-Gilligan. "Common violations include: fraud, misappropriation of funds, misrepresentations, unregistered or unlicensed ...
Posted in: Tennessee

Tennessee fraudulent misrepresentation claims - and "investment contract" claims under the State's Blue Sky Law - fail the "reasonable reliance" requirement, where the plaintiff himself asserts it's a fraud because nobody would believe such a thing.

In a case the Court of Appeals charitably called "astonishing," a lawyer and his successful businessman friend and client paid large amounts of cash over time to a promoter running a "Black Money" scam that also borrowed elements from the "Nigerian Prince" script. The scammers obtained money from both Lambert and ...

Posted in: Tennessee

On April 12, the Tennessee Republican Party filed a petition in the US Sixth Circuit Court of Appeals, seeking to invalidate the SEC's approval of new rules extending the MSRB's long-standing "pay-to-play" prohibitions to new municipal advisors.

The MSRB has prohibited "pay-to-play" practices in the municipal securities space since its Rule G-37 was promulgated in 1994. The Rule does not prohibit political contributions by bond dealers outright, but instead prohibits them from doing business with issuers to who's elected officials a dealer has made political ...

Posted in: MSRB, SEC, Tennessee

The Tennessee Supreme Court released a December 14 decision reviewing personal jurisdiction over non-resident defendants. First Community Bank, NA v. First Tennessee Bank, NA, No. 2012-01422-SC-R110CV (Tenn. Dec. 14, 2015). The case involved a Virginia bank's securities claims against a host of defendants, among them a couple Tennessee-resident firms and three non-resident Ratings Agencies having rated various collateralized-debt-obligation securities - some of which had Tennessee securities as a small portion of their underlying portfolio assets. The trial and ...

Posted in: Tennessee

There's a developing circuit split over whistleblower standing for retaliation claims. A decision this week extended that split to U.S. district courts within Tennessee, too. In Verble v. Morgan Stanley Smith Barney, LLC, No. 3:15-CV-74-TAV-CCS (Dec. 8, 2015 USDC EDTN), the Eastern District of Tennessee joined with the Fifth Circuit view that Dodd-Frank whistleblowers must report to the SEC to have standing. An earlier decision from the Middle District of Tennessee had sided with the Second Circuit's view, deferring to the broader language of the SEC regulations that would ...

The Tennessee Securities Division, Department of Commerce and Insurance (Julie Mix McPeak, Comm'r) recently confirmed its launch of a comprehensive three-year cycle examination program covering all Tennessee-based broker-dealers and state-registered investment advisers. The examinations will be "desk-examinations" requiring registrants to provide detailed documentation in response to some 18 categories of inquiry designed to ferret out non-compliant firms or "red flags" that may indicate regulatory violations. Unresolved issues or red flags will trigger ...
Posted in: Tennessee
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