Employers Must Exercise Caution When Drafting Settlement Agreements that Could Violate SEC Rule 21F-17(a) and Section 922 of the Dodd-Frank Act, the Whistleblowers Anti-Retaliation Provisions
Brian A. Carlis, Shareholder and member of Stark & Stark’s Securities Arbitration Group, was featured in the article, “Few RIAs Accept Finra Invitation,” published in the Wall Street Journal on May 29, 2013.
On April 10, 2013, the Securities and Exchange Commission (“SEC”) and Commodity Futures Trading Commission jointly adopted and announced new identity theft red flag regulations, which are being imposed pursuant to their respective authority under Dodd-Frank Act and the Fair Credit Reporting Act (“FCRA”).
In July 2012 Netflix, Inc. (“Netflix”) Chief Executive Officer, Reed Hastings, posted a seemingly innocuous statement to his personal Facebook page:
Congrats to Ted Sarandos, and his amazing content licensing team. Netflix monthly viewing exceeded 1 billion hours for the first time ever in June. When House of Cards and Arrested Development debut, we’ll blow these records away. Keep going, Ted, we need even more!
As we advised you in our Fall Compliance Update, on October 3, 2011, the U.S. Securities and Exchange Commission’s (“SEC”) new Rule 13h-1, under Section 13(h) of the Securities Exchange Act of 1934, became effective. The purpose of the new rule is to assist the SEC in identifying and obtaining trading information on market participants that are involved in a large amount of trading activity in the U.S. securities markets.
Effective September 19, 2011, the Securities and Exchange Commission amended Rule 205-3 of the Investment Advisers Act of 1940 (“Advisers Act”) which generally prohibits an investment advisor from entering into, extending, renewing or performing any investment advisory services for compensation based on a share of capital gains or capital appreciation of, the funds of a client (“performance fees”).
Recently the SEC approved a new rule to define the term “family Office.” Pursuant to the SEC’s new definition, a “Family Office” is a firm: 1) whose only clients are family clients; 2) and is wholly owned by family clients and controlled by family members and/or family entities; and 3) does not hold itself out to the public as an investment adviser.
Stark & Stark’s Employment Group was quoted in the September 13, 2011 FundFire article, AllianceBernstein Sues More Departed Advisors.
The article discusses the continuing legal battle AllianceBernstein is engaged in with financial advisors who recently left their firm and took clients with them. The firm filed suit against eight former brokers, claiming that they violated their non-solicitation agreements after they left without giving sufficient notice and taking their client lists and other confidential information with them.
Recently, Ashton Kutcher’s comments regarding several internet based social media companies has come under scrutiny after Kutcher authored an article for Details magazine in which he praises Tinychat, Fourquare, Arbnb and several other companies, while failing to disclose the fact that he is an investor in the companies. Now the Federal Trade Commission and the Securities Exchange Commission are questioning if this move warrants a federal investigation.
For those who participate in the offering/sale of variable annuities and who may be subject to FINRA examinations, I have summarized some of the key points from Mr. Ketchum’s recent speech before the Insured Retirement Institute Government, Legal and Regulatory Conference.
Exam Priorities
FINRA Goals
FINRA is requesting broader data collection with increased analysis to spot trends and create risk-base exams.
Recent Exam findings
