Securities Regulation

Firm Advice: Volcker Rule: Observations on Interagency FAQs, OCC Interim Examination Guidelines

By Davis Polk & Wardwell LLP | Posted on

More than six months after the release of final Volcker Rule regulations, banking organizations continue to grapple with a long list of interpretive questions and an opaque process for seeking clarity from the Volcker agencies. Regulatory silence broke for a brief moment this past week in the form of a short interagency FAQ and, from the OCC, interim examination guidelines for assessing banking entities’ progress toward Volcker Rule compliance during the conformance period.

Read the full article here.

SEC Targets High-Frequency Traders, Dark Pools

By James Kollar | Posted on

Yesterday, Securities and Exchange Commission Chairman Mary Jo White announced a broad set of initiatives to tackle the growing concerns about the influence of computer-driven trading on the stock market. Included in these initiatives is the proposed increase in regulation of high-frequency traders and dark pools, in order to boost market stability, improve markets for smaller companies, and enhance transparency.

(more…)

A Look at the Past, Present, and Expected Future of Insider Trading

By Roxana Guidero, J.D. Candidate 2016 | Posted on

As news of the insider trading probe into Phil Mickelson and Carl Icahn gains steam, insider trading is on the mind of (most) people.  On its website, the Securities and Exchange Commission (“SEC”) notes that “insider trading continues to be a high priority area for the SEC’s enforcement program” and  “in recent years, the SEC has filed insider trading cases against hundreds of entities and individuals.”[i]  As media is flooded with insider trading updates, a look at the past, present, and expected future of insider trading charges is warranted. (more…)

Flash Boys–Concerns Over High Frequency Trading

By Nahal Bahri, J.D. Candidate 2015 | Posted on

High frequency trading is gaining significant media attention recently as Michael Lewis published his book, Flash Boys: A Wall Street Revolt, on the subject. While high frequency trading (HFT) was introduced into the markets in 1999, this platform for conducting rapid electronic trades of securities has been gaining significant attention by federal regulators including the Securities and Exchange Commission (“SEC”), the Commodity Futures Trading Commission (“CFTC”), and most recently, the Senate.

(more…)

Inside the Courts: An Update From Skadden Securities Litigators

By Skadden, Arps, Slate, Meagher, and Flom LLP | Posted on

This quarter’s issue of Inside the Courts, Skadden’s securities litigation newsletter, includes summaries and associated court opinions of selected cases principally decided between late January and early May 2014. The cases address developing state and federal court trends in bylaws, class certification, fiduciary duties, insider trading, interpreting the U.S. Supreme Court’s Janus decision, PSLRA matters and applications of the securities laws to domestic and foreign corporations.

Click here to read more.

Appeals Court Assails “Too Easy” Insider Convictions

By Sreelekha Haridas Maruthur, LL.M. Candidate 2014 | Posted on

The outcome of an appeal pending in the U.S. Court of Appeals for the Second Circuit in Manhattan on the question of defining ‘tippee-liability’ for insider trading could become a turning point in the prosecution of insider trading cases. Assailing the jury instruction in the case, the Court of Appeals panel criticized the trial judge for making convictions for insider trading ‘too easy’ by not requiring proof that the defendant-appellants, who were remote tippees, knew that the tipper personally benefitted by disclosing the material nonpublic information.

(more…)

Time to Rethink the Self-Regulatory Framework for Stock Exchanges

By Richard Andrews, J.D./M.B.A. Candidate 2015 | Posted on

The SEC will likely reevaluate the regulatory framework governing securities exchanges in light of new marketplace dynamics and trading practices. Under the current framework, national exchanges such as the NYSE and Nasdaq serve as special self-regulatory organizations (“SRO”) that establish and enforce rules for members, including broker-dealers. But advances in automation and electronic communication technologies have increasingly enabled broker-dealers to set up alternative trading systems (“ATS”) that compete, sometimes directly, with the national exchanges.

(more…)

SEC Rule 10b5-1: Proposed Amendments to Prevent Insider Trading

By Kirill Lelchitskiy, LL.M. Candidate 2014 | Posted on

In Rule 10b5-1 of the Securities Exchange Act of 1934 (“Exchange Act”), the SEC created an affirmative defense to any charge of insider trading “designed to cover situations in which a person can demonstrate that the material nonpublic information was not a factor in the trading decision.” Established as one of the tools to promote trade, the provision created a safe harbor for insider trading when the trade was made according to a contract, instructions were given to another, or a written plan that did not allow an insider to influence or effect subsequent purchases or sales if such a plan was created before the person had inside information.

(more…)

SEC Approves New FINRA Supervision Rules

By Davis Polk and Wardwell LLP | Posted on

Financial Industry Regulatory Authority (“FINRA”) rules require broker-dealer members to establish and maintain a system and written procedures to supervise the activities of their personnel, which are reasonably designed to achieve compliance with the federal securities laws and FINRA rules.

(more…)