In recent weeks, we have observed significant new developments in securities regulation related to two enforcement actions by the Commission and an unexpected (and, to our knowledge, unprecedented) new rule adopted by a state securities regulator.  First, the Commission has published enforcement actions against registered investment advisers (“RIAs”), involving: (a) failure to make conflicts-related disclosures about payment of forgivable recruitment loans/bonuses; and (b) failure to comply with Rule 206(4)-3 (the “Solicitation Rule”) when using social media influencers acting as referral sources.  Second, the Tennessee Securities Division has fundamentally changed the process for issuers and broker-dealers attempting to shield themselves from civil liability arising from unregistered, non-exempt securities offerings through rescission offers.

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Additional contributors:
Thomas B. Cain,  tcain@kilpatricktownsend.com
Alexandra M. Fenno,  afenno@kilpatricktownsend.com
Jeffrey T. Skinner, jskinner@kilpatricktownsend.com

June Regulatory Updates from Cari Hopsfenperger at Hardin Compliance Consulting LLC.

Topics include:

• DOL issues Cybersecurity Guidance — The DOL guidance was published in three separate pieces: Tips for Hiring a Service Provider with Strong Cybersecurity Practices, Cybersecurity Program Best Practices, and Online Security Tips for Participants and Beneficiaries.  Contributed by Glenn R. Skreppen, Senior Compliance Consultant
• Updates to State Senior Laws & Resources  — The law firm of Bressler, Amery and Ross, has created and continues to update its Senior and Vulnerable Investors Issues map, with summaries of the requirements for all 50 states. Contributed by Carolyn W. Mendelson, Senior Compliance Consultant
• Form ID Updates
• NASAA Annual Report on State Registered Advisers
• 2021 Cayman CRS (and FATCA) Updates 
• Do Your Options Procedures Need Work?
• Can You Pass This Quiz Regarding the Use of Predispute Arbitration Agreements? 
• SEC Charges Broker-Dealer for Failing to File SARS

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Thanks to Kurt Wolfe and Chris Ekimoff for having me as a guest on the lastest installment of PLI’s inSecurities podcast.  As someone who tunes in regularly, it was a pleasure for me to do. I enjoyed chatting about broker-dealer and investment adviser regulatory issues, my work with PLI including the upcoming live webcast Securities Law and Practice 2021: How the SEC Works on June 28.

To hear this episode, and other episodes, click here. 

This month’s securities enforcement article uses the television show “The Crown” as its primary source of inspiration in memory of Prince Philip, Duke of Edinburgh, who died on April 9, 2021; in awe of Oprah’s timing, interviewing skills, ability to get an interview; and out of respect for the Queen, “Her Majesty Elizabeth the Second, by the Grace of God, of the United Kingdom of Great Britain and Northern Ireland and of Her other Realms and Territories Queen, Head of the Commonwealth, Defender of the Faith,” and the Prime Ministers who served under her.  Please note that, as far as we know, “The Crown” did not involve investments in securities. . . Nonetheless, the Netflix television show does involve rules and codes of conduct; intrigue and misdirection; punishment and praise; drama and comedy; and good and evil.

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When you think about it, puns are kind of like securities enforcement actions. They could make you groan, they could make you laugh or they could make you think—causing you to say, “Oh, I see” (which is different from the SEC’s OCIE).

In the latest edition of NCSP Currents, we explore the connection of puns and other plays on words with SEC and FINRA enforcement actions and initiatives.

Read more here.

Contributors:

Brian L. Rubin, brianrubin@eversheds-sutherland.com

Andrea L. Gordon, andreagordon@eversheds-sutherland.com