Preemption of state securities laws

With the recent announcement by the US Securities and Exchange Commission (SEC) that it will hold an open meeting on June 5, 2019, to consider adopting Regulation Best Interest, one of the major issues that the SEC may clarify is its view of whether Regulation Best Interest preempts state securities regulations that impose a fiduciary duty on broker-dealers.

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DC Circuit finds negligent, but not willful fraud for inadequate disclosures

In a much-anticipated decision, on April 30, 2019, the US Court of Appeals for the District of Columbia Circuit issued its decision in Robare, a case that concerned an investment adviser’s (IA) disclosure of conflicts of interest regarding its receipt of payments from a custodian. The court held that the Commission’s findings of “negligent” violations under Section 206(2) were supported, but the Commission’s findings of “willful” violations under Section 207, based on the same negligent conduct, “are erroneous as a matter of law.”

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OCIE Lists Privacy Blunders; SEC Explains When Digital Assets become Securities; Ohio Mandates IARs and RR to Report Elder Abuse; FINRA Gives Broker an “F” in Email Review; and Google Searches Don’t Count as Due Diligence

Regulatory Updates from Jaqueline Hummel at Hardin Compliance Consulting LLC.

Topics include:

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Understanding fiduciary investment advice regulations

By all accounts, 2019 will see the advancement of a number of fiduciary and best interest investment advice regulations at both the federal and state levels. Firms subject to these regulations will face challenges in dealing with rules that will impose a host of new obligations, and that may overlap and conflict with one another. Eversheds Sutherland has developed a chart that is intended to help firms take stock of the evolving framework and aid firms in putting the pieces together.

Find the chart here