Non-Broker Protocol Transitions – How to Prepare for and Avoid Litigation

The Broker Protocol simplified employment transitions by financial professionals over the last decade and a half. (I use the term “employer” and “employment” loosely, and it is intended to capture independent contractor situations too.) The Broker Protocol made it relatively simple to transition from one broker-dealer or financial institution to another without fear of litigationContinue reading “Non-Broker Protocol Transitions – How to Prepare for and Avoid Litigation”

Proposed Changes to FINRA’s MFA Requirement on Behalf of Law Firms and Compliance Consultants

This is a gentle reminder that while FINRA only regulates its broker-dealer members, it hosts the Investment Adviser Registration Depository (“IARD”) and Central Registration Depository (“CRD”). The IARD and CRD are two systems used by investment advisers registered with states and the SEC and exempt-reporting advisers. FINRA has adopted a new multi-factor authentication system (“MFA”)Continue reading “Proposed Changes to FINRA’s MFA Requirement on Behalf of Law Firms and Compliance Consultants”

SEC OCIE Issues Risk Alert to Private Fund Advisers

On Tuesday, June 23, 2020, the Office of Compliance Inspections and Examinations (“OCIE”) issued a Risk Alert aimed at registered investment advisers that manage private equity funds and hedge funds. The Risk Alert can be found here. The Risk Alert identified three primary areas for deficiencies issued by OCIE to these advisers as a resultContinue reading “SEC OCIE Issues Risk Alert to Private Fund Advisers”

SEC FOIA Process Steps Into Century–Will it Stay Post-COVID?

The Securities and Exchange Commission recently modified its process for requesting confidential treatment under Rule 83. As a background, Rule 83 provides a procedure for investment advisers to request that information submitted during an examination, inspection, or investigation be withheld when requested under the Freedom of Information Act. The recent guidance now permits persons toContinue reading “SEC FOIA Process Steps Into Century–Will it Stay Post-COVID?”

[Certain] State Securities Commissioners Overstepping Legal Authority in Mandating Form CRS

Many state securities commissioners are starting to require the preparation, filing, and delivery of Form CRS for investment advisers in their jurisdictions. State securities authorities must be prepared to provide their legal authority for requiring Form CRS or make it clear that compliance with their desires are optional. It is a detriment to the industry,Continue reading “[Certain] State Securities Commissioners Overstepping Legal Authority in Mandating Form CRS”

The Lawfulness and Morality of Applying for PPP Loans and Not Disclosing Them

Background The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020, and introduced the Paycheck Protection Program (the “PPP”) with the goal of preventing job loss and small businesses failure due to losses caused by the COVID-19 pandemic. To accomplish the policy behind the program, qualifying businessesContinue reading “The Lawfulness and Morality of Applying for PPP Loans and Not Disclosing Them”

SBA Releases New FAQ on “Necessity” Standard and Good Faith Obligation

On May 13, 2020, the SBA released new guidance in consultation with the Department of the Treasury. The guidance is set forth below: 46. Question: How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request? Answer: When submitting a PPP application, all borrowers must certify in good faith that “[c]urrentContinue reading “SBA Releases New FAQ on “Necessity” Standard and Good Faith Obligation”

SBA Extends Safe Harbor for Good Faith Certification to May 14, 2020

On April 28, 2020, the U.S. Small Business Administration published an interim final rule. This interim final rule applies to applications submitted under the Paycheck Protection Program (“PPP”) through June 30, 2020, or until funds made available for this purpose are exhausted. As noted in the interim final rule, the SBA provided a limited safeContinue reading “SBA Extends Safe Harbor for Good Faith Certification to May 14, 2020”

Updated Guidance for Advisers on Disclosure for the Paycheck Protection Program

The Securities and Exchange Commission’s Division of Investment Management released new guidance on April 27, 2020, addressing disclosure surrounding an investment adviser’s participation in the Paycheck Protection Program. That guidance is set forth below: Q.  I am a small advisory firm that meets the requirements of the Paycheck Protection Program (PPP) established by the U.S.Continue reading “Updated Guidance for Advisers on Disclosure for the Paycheck Protection Program”

The Coronavirus Impact on FINRA Arbitration and Mediation

FINRA recently announced that it has postponed all in-person arbitration and mediation proceedings through July 3, 2020. FINRA staff are currently contacting parties to reschedule hearings or offer the option to consider virtual hearing services (via Zoom or teleconference). FINRA reminded parties that postponement would not effect any deadlines, so parties should still be prepared to exchangeContinue reading “The Coronavirus Impact on FINRA Arbitration and Mediation”