Category Archives: Enforcement

First SEC Enforcement Action Against Decentralized Digital Asset Exchange Echoes Recent Public Statements

In the first case of its kind, the Securities and Exchange Commission (SEC) announced an enforcement action related to EtherDelta, a decentralized digital asset trading platform that the SEC found operated as an unregistered national securities exchange. The enforcement action was brought against Zachary Coburn (Founder) of EtherDelta, rather than against any entity.
 Additional contributors to this post:

Time to Pay Your Dues, Increase Cross Trade Testing and Disclose Your Conflicts

November Regulatory Updates from Jaqueline Hummel at Hardin Compliance Consulting LLC.

Topics include:

Read the full post here.

One-Two-Three Punch: SEC and FINRA Announce Actions Against Unregistered Broker, Digital Asset Manager and FINRA Registered Person

On September 11, the Securities and Exchange Commission and Financial Industry Regulatory Authority separately announced three “first of their kind” enforcement actions related to digital assets. Over the past year, regulators have repeatedly stressed the need for compliance with the securities laws when transacting in digital assets that are securities. These actions emphasize the need for all market participants — not just issuers — to comply with the securities laws, and further underscore that compliance with the securities laws extends beyond avoiding fraudulent conduct.

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Additional contributors to this post:

Nathan A. Howell

Verity A. Van Tassel Richards,

Daniel EngorenDENGOREN@SIDLEY.COM

 

 

Susan Schroeder: Avoiding Regulation by Enforcement

FINRA’s head of enforcement’s speech yesterday at SIFMA AML was noteworthy.  Schroeder signaled a commitment by FINRA to avoid regulation by enforcement.  She said “(t)ransparency is particularly important in Enforcement. In order for the industry to be able to follow a rule, FINRA’s expectations have to be clear and rule violations have to be foreseeable. We want to avoid any perception of “rulemaking by enforcement.” That is why as we continue to integrate two enforcement teams, we are also thinking about our internal processes when we bring a case. In particular, we are considering how to identify any novel issues early, and ensure that we flag and discuss these issues with the rest of FINRA to develop the most effective regulatory response on behalf of the organization. Enforcement actions are one type of tool that FINRA can use to effect compliance. Other departments have other tools, and we want to make sure that we consult and collaborate early and often with our FINRA colleagues to consider issues holistically, and to think about the range of actions we might take, from an enforcement action to a Regulatory Notice or even a new rule.

Susan Schroeder’s SIFMA AML Remarks