• CFTC Whistleblower Program Issues $10 Million Award
    (04/08/2016)

    The Commodity Futures Trading Commission (“CFTC”) announced on April 4, 2016, that it would make a $10 million award to a whistleblower through authority provided by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. This is the third whistleblower award made by the CFTC, dwarfing the prior awards of $290,000, announced on September 29, 2015, and $240,000, announced on May 20, 2014.

  • SEC Proposes Expanded Disclosure of ATSs that Facilitate Transactions in NMS Stocks
    (11/23/2015)

    On November 18, 2015, the U.S. Securities and Exchange Commission (the "Commission") voted to propose amendments to Regulation ATS under the Securities Exchange Act of 1934 (the "Exchange Act") that would adopt new Rule 304 of Regulation ATS, which would require an "NMS Stock ATS" to file new Form ATS-N with the Commission.1  Proposed Rule 304 and new Form ATS-N would significantly expand upon the current disclosure requirements of Rule 301(b)(2) of Regulation ATS.  Comment on the proposed amendments must be submitted to the Commission within 60 days of publication of the Proposing Release in the Federal Register. We present the following summary of the Commission's lengthy proposal that will have a significant impact on alternative trading systems ("ATSs"), including so-called "dark pools."

  • CFTC Asserts Jurisdiction Over Bitcoin
    (October, 2015)

    The Commodity Futures Trading Commission (“Commission”) recently entered an order finding that Coinflip, Inc. d/b/a Derivabit (“Coinflip”), an unregistered Bitcoin options trading platform, and its founder and CEO, Francisco Riordan (“Riordan”) violated Sections 4c(b) and 5h(a)(1) of the Commodity Exchange Act (“CEA”), and Commission Regulations 32.2 and 37.3(a)(1). The action is based on the Commission’s finding, for the first time, that “Bitcoin and other virtual currencies are encompassed in the definition [of ‘commodity’] and are properly defined as commodities.” The Commission made this finding without discussion other than to note that Section 1a(9) of the CEA defines “commodity” to include “all services, rights, and interests in which contracts for future delivery are presently or in the future dealt in.” The Commission did not impose penalties against either respondent. 

  • Forex Settlement Confirms DoJ’s Recent Comments on Corporate Recidivism
    (05/20/2015)

    Enforcement Defense Update: The Department of Justice (DoJ) today announced fines totaling $5.6 billion against five of the world’s largest banks related to the banks’ alleged manipulation of the foreign exchange markets (“forex”). The settlements are notable for a number of reasons; in particular, the settlements highlight the strong position the DoJ appears to be taking with respect to enforcement declinations and recidivism.

  • SEC ALJ Issues Important Decision on the Duty of Supervision of General Counsel and Compliance Personnel
    (09/12/2010)

    In a case that has been watched closely in the industry, the SEC’s Chief Administrative Law Judge recently cleared the former General Counsel of Ferris Baker Watts of charges that he failed to supervise a rogue broker at the firm.