Greater Richmond Compliance Roundtable, Speaker, "Cybersecurity and Data Protection for Compliance Professionals"
Issuers and others involved in offerings of crypto asset securities, such as "ICO"s, must be alert to the potential application of SEC Regulation M.
Last week, the SEC and DOJ filed civil and criminal insider trading charges against a former Equifax executive for selling shares of Equifax stock prior to public disclosure of the company’s massive data breach. The case demonstrates an increased emphasis by the SEC on cybersecurity-related disclosures and follows closely on the heels of updated SEC guidance that admonishes public companies to disclose material cyber risks and incidents and to adopt policies and procedures to prevent insider trading on undisclosed data breaches.
This week, the U.S. Court of Appeals for the Tenth Circuit will hear a case with far-reaching consequences, literally, for the U.S. Securities and Exchange Commission's enforcement activity. In SEC v. Traffic Monsoon LLC, the commission is asking the court to hold that the principal anti-fraud provisions of the federal securities laws apply extraterritorially in commission enforcement actions and administrative proceedings so long as the alleged misconduct satisfies the “conduct and effects test,” a test the Supreme Court dispatched in 2010. If the commission has its way, more aggressive overseas enforcement activity could be in store, even for misconduct not connected to a domestic securities transaction. In this article, we evaluate the legal and policy issues Traffic Monsoon raises.
On March 14, 2018, the Securities and Exchange Commission (the “Commission”) proposed Rule 610T to create a pilot regarding transaction fees,1 creating three Test Groups designed to obtain data resulting from the lowering of the maximum access fee from its current $.003 per share2 to $.0015 per share for Test Group 1 and $.0005 per share for Test Group 2. For Test Group 3, the Commission is proposing to prohibit rebates in connection with an execution, not only with respect to top-of-book liquidity, but also with respect to depth-of-book interest. The Commission also eliminated a potential work-around to the prohibition on rebates in Test Group 3 by also prohibiting discounts on transaction fees linked to a broker-dealer’s posted volume on an exchange. However, an exchange could offer its market maker incentives for meeting market quality metrics adopted as part of new exchange rules.