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Amendments to FINRA Rule 3240: Key Changes and Takeaways
By Robert R. Boeche, Partner; and Alex S. Lagotta, Associate of Shustak Reynolds & Partners, P.C. posted on Tuesday, December 3, 2024.
FINRA recently announced in Regulatory Notice (“Reg. Notice”) 24-12, amendments to Rule 3240 (the “Rule”) which generally prohibits borrowing from or lending to customers by registered persons. These amendments include: modernizing the "immediate family" definition; narrowing exceptions for personal and business relationships; and introducing stricter notice and approval requirements for permissible arrangements. In addition, the Rule’s scope now extends to arrangements made before and after the broker-customer relationship, with new obligations on member firms to assess risks associated with such arrangements. These amendments will take effect on April 28, 2025 (the “Compliance Date”). Read More
SEC Announces 2025 Examination Priorities
By George C. Miller, Partner of Shustak Reynolds & Partners, P.C. posted on Tuesday, November 12, 2024.
On October 21, 2024, the U.S. Securities and Exchange Commission (SEC) Division of Examinations released its annual examination priorities for the fiscal year 2025, outlining areas of risk and focus for market participants. As in past years, the SEC’s areas of focus include upholding fiduciary obligations, avoiding conflicts of interest, and cybersecurity. The SEC’s newer areas of focus include ensuring proper use of artificial intelligence (AI) and private fund adviser regulations. The SEC’s priorities reflect both longstanding concerns and emerging risks in the financial markets. Read More
SEC v. Jarkesy: A New Horizon for Securities Litigation
By Robert R. Boeche, Partner; and Ben Kaplan, Associate Attorney of Shustak Reynolds & Partners, P.C. posted on Monday, November 11, 2024.
The Supreme Court's decision in SEC v. Jarkesy (“Jarkesy”) curtails the Securities and Exchange Commission’s (SEC) use of SEC-appointed judges in its enforcement actions. Jarkesy sets a new precedent for how regulatory enforcement actions might be adjudicated moving forward, not only for SEC actions, but also enforcement actions across other regulatory agencies, including the Financial Industry Regulatory Authority (FINRA). Such potential ramifications of this ruling are detailed below. Read More
Are You Considered an ERISA Fiduciary Now?
By Robert R. Boeche, Partner of Shustak Reynolds & Partners, P.C. posted on Tuesday, August 27, 2024.
On April 25, 2024, with the enactment of the final version of its Retirement Security Rule (the "Final Rule"), the Department of Labor (“DOL”) imposed a fiduciary standard under the Employee Retirement Income Security Act of 1974 (“ERISA”) that it believes will "uniformly apply to all investment advice that is provided to [retirement investors], concerning the investment of their retirement assets.” Read More
SEC Reforms Decades-Old Exemption for Internet Advisers
By Robert R. Boeche, Partner; Robert D. Conca, Partner; and Melissa Donaldson, Law Clerk of Shustak Reynolds & Partners, P.C. posted on Tuesday, July 9, 2024.
As we have highlighted, on March 27, 2024, the Securities and Exchange Commission (“SEC”) amended the internet adviser exemption by requiring functional websites and prohibiting in-person clients. The amendments aim to modernize the 22-year-old rule’s investor protections and address what the SEC considers significant compliance gaps by advisers relying on the exemption. Read More
SEC Regulation S-P Changes: What You Need to Know
By Robert R. Boeche, Partner; Robert D. Conca, Partner; and Melissa Donaldson, Law Clerk of Shustak Reynolds & Partners, P.C. posted on Tuesday, July 9, 2024.
On May 16, 2024, the Securities and Exchange Commission (“SEC”) adopted significant amendments to Regulation S-P (“Reg S-P”). Among other changes, these amendments require covered institutions to create written policies and procedures for incident response programs addressing unauthorized access to or use of customer data. Read More
The Art of Advocacy and Arbitration in High-Stakes Financial Disputes With Erwin J. Shustak
By Erwin J. Shustak, Managing Partner of Shustak Reynolds & Partners, P.C. posted on Monday, June 24, 2024.
The Securities and Exchange Commission Announces Amendments to Internet Investment Adviser Registration Rules
By Robert D. Conca, Partner; and Eden Elkayam, Law Clerk of Shustak Reynolds & Partners, P.C. posted on Tuesday, April 30, 2024.
On March 27, 2024, the Securities and Exchange Commission (“SEC”) adopted amended rules regarding the registration requirements that apply to internet investment advisers. This anticipated announcement follows other public announcements demonstrating the SEC’s focus on the internet adviser issues. Read More
SEC Rules 3a5-4 and 3a44-2 Requiring Registration of Liquidity-Providing Persons as "Dealers"
By Robert R. Boeche, Partner; Robert D. Conca, Partner; and Eden Elkayam, Law Clerk of Shustak Reynolds & Partners, P.C. posted on Tuesday, March 19, 2024.
On February 6, 2024, the Securities and Exchange Commission (“SEC”) adopted Rules 3a5-4 and 3a44-2 (“Final Rules”) defining the phrase “as a part of a regular business” and identifying activities that would cause people within certain activities to be “dealers” or “government securities dealers.” Read More
The Securities and Exchange Commission Announces New Set of Private Fund Rules
By Robert R. Boeche, Partner; Robert D. Conca, Partner; and Eden Elkayam, Law Clerk of Shustak Reynolds & Partners, P.C. posted on Tuesday, March 19, 2024.
On August 23, 2023, the Securities and Exchange Commission (“SEC”) adopted new rules regarding the regulation of private funds and their advisors, providing an update to the existing compliance rules already in place for investment advisers. Read More