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Overbroad Confidentiality Agreement Found to Illegally Restrict an Employee’s Right to Work
By Katherine S. Bowles, Esq. and Keith Collins, law clerk of Shustak Reynolds & Partners, P.C. posted on Monday, December 28, 2020.
California courts routinely refuse to enforce employment agreements that have non-compete provisions, and more frequently are rejecting certain non-solicitation provisions, based on California’s strong public policy favoring an employee’s right to work that is enumerated in California Business and Professions Code § 16600 [...] Read More
California’s Amended Homestead Exemption Provides Increased Protection for Homeowners
By Erwin J. Shustak, Esq., partner, and Keith Collins, law clerk of Shustak Reynolds & Partners, P.C. posted on Wednesday, December 2, 2020.
A homestead exemption protects a specified dollar amount of a debtor’s equity in his or her principal dwelling from attachment by a judgment creditor. In California, debtors are automatically protected by the homestead exemption contained in California Code of Civil Procedure section 704.730. [...] Read More
OCIE Alert Discusses Compliance Deficiencies
By Robert R. Boeche II, Esq., of Shustak Reynolds & Partners, P.C. posted on Tuesday, November 24, 2020.
The Office of Compliance Inspections and Examinations (“OCIE”) recently sent out an alert highlighting the deficiencies regarding Rule 206(4)-7 (the “Compliance Rule”), a subsection of the Investment Advisers Act of 1940 (“Advisers Act”). It is significant for advisers to understand and uphold these requirements in order to avoid compliance violations. [...] Read More
SEC Proposes New Exemptions to Expand the Scope of "Finders"
By Robert R. Boeche II, Esq., of Shustak Reynolds & Partners, P.C. posted on Tuesday, November 17, 2020.
In October 2020, the U.S. Securities and Exchange Commission (“SEC”) proposed an order which could expand when/what “finders” are permitted to receive as compensation without registering as a broker. [...] Read More
JPMorgan Loses FINRA Claim Against Departing Representatives
By Joseph M. Mellano, Esq. of Shustak Reynolds & Partners, P.C. posted on Friday, October 30, 2020.
On October 22, 2020, a panel of FINRA arbitrators rejected claims brought by JPMorgan against three registered representatives–Nathan Shields, Mark Obrzut, and Jackson Stewart–who left the JPMorgan for Raymond James in 2018. [...] Read More
Financial Advisors on the Move Despite the Pandemic
By George C. Miller, Esq. of Shustak Reynolds & Partners, P.C. posted on Tuesday, October 20, 2020.
In our March 2020 post, published soon after stay-at-home orders were issued across the country, we hypothesized that the pandemic could present a unique opportunity for financial advisors seeking to transition from one firm to another. As it turns out, the number of advisors who have changed firms in 2020 is not all that different from years past. After an initial decline in mid-March, advisors have been moving at an increasing pace throughout the year. According to a Financial Advisor IQ article, the “game of musical chairs” continues, and advisor transitions have now returned to the same level as the fourth quarter of 2019. [...] Read More
THE BROKER PROTOCOL: NEW TREND EMERGING AS COURTS ALLOW BROKERS TO SERVICE FORMER CLIENTS?
By Sara Sabzerou, Law Clerk of Shustak Reynolds & Partners, P.C. posted on Tuesday, October 13, 2020.
Just last month, Florida federal Judge Tom Barber shot down Wells Fargo’s motion for an emergency temporary restraining order (“TRO”) against their former brokers, Brady Pedler and Joseph Santana. Wells Fargo claimed the firm would suffer “irreparable harm” due to Pedler and Santana’s solicitation of former clients to their new employer, RBC Wealth Management. Pedler and Santana managed $306 million in assets during their time at Wells. This ruling followed a similar result in Michigan, where Judge Janet Neff denied J.P. Morgan’s emergency TRO motion against a former broker who left to join Ameriprise Financial. [...] Read More
Confidentiality is a Top Priority and You Should Make It Yours, Too
By Robert R. Boeche II, Esq., Partner of Shustak Reynolds & Partners, P.C. posted on Wednesday, September 30, 2020.
The SEC and other regulatory bodies have made protecting the non-public personal information of clients a top priority. This can be seen in the multitude of rules, enforcement actions and books, and records requirements imposed upon registrants in the past few years. [...] Read More
FINRA SUSPENDS EX-MORGAN STANLEY BROKER WHO ADVISED CLIENT ON OUTSIDE TRADING
By Erwin J. Shustak, Partner and Andrew Steiger, Law Clerk of Shustak Reynolds & Partners, P.C. posted on Monday, September 28, 2020.
It can be difficult to know whether a broker’s mistake constitutes a private securities trading violation. Some rules are clear-cut; others are not. While employed as a Morgan Stanley Wealth Management broker, Christopher Reid executed approximately 200 equity and options trades for a new client his employer previously had rejected as a potential firm client. After being rejected by Morgan Stanley, that client opened a self-directed brokerage account with another FINRA member brokerage in June 2018. The name of the brokerage firm where these trades took place was not disclosed in the Letter of Acceptance, Waiver and Consent (“Consent Letter”), which is a document commonly created through settlement of the FINRA disciplinary process. [...] Read More
SEC MODERNIZES THE ACCREDITED INVESTOR DEFINITION
By Robert R. Boeche II, Esq., Partner and Andrew Steiger, Law Clerk of Shustak Reynolds & Partners, P.C. posted on Tuesday, September 15, 2020.
On August 26, 2020, the Securities and Exchange Commission (SEC) adopted updates to the definition of “accredited investor” under the Securities Act of 1933. Historically, only investors who met specific income or net worth requirements qualified for the accredited investor designation, which permits participation in private markets. Now, an individual can also qualify as an accredited investor based on established, clear measures of financial sophistication. Also, certain entity types that were previously excluded from the designation are now allowed. [...] Read More