On April 16, 2019, the SEC’s Office of Compliance Inspections and Examinations (OCIE) issued a risk alert (Alert) highlighting some of the most frequent issues it has identified regarding compliance with Regulation S‑P. The issues were identified in recent examinations of SEC-registered investment advisers and brokers and dealers (together, registrants or firms).
Cyberattacks are on the rise. Is your company prepared for the myriad of cyber risks in 2019?
The SEC's Division of Corporation Finance issued both a "Framework for 'Investment Contract' Analysis of Digital Assets" and a no-action letter relating to a blockchain-based consumptive token on April 3, 2019. The Framework is intended to be a plain English description of how the SEC staff applies the so-called Howey test to determine if a digital asset is a security under the federal securities laws. It also adddresses the concept of mutability of a digital asset whereby a digital asset initially issued as a security later converts to a digital asset that is not a security because of the digital asset's use on a fully-functional platform, among other things.
The Division also issued a no-action letter to an air charter services company, TurnKey Jet, Inc. The no-action letter permits TurnKey to issue a consumptive/utility token, subject to the criteria set out in the letter.
A bipartisan bill has just been introduced in the Senate that would significantly expand the remedies available to the U.S. Securities and Exchange Commission’s Enforcement Division. Introduced on March 14 by Sens. Mark Warner, D.-Va., and John Kennedy, R.-La., the Securities Fraud Enforcement and Investor Compensation Act would, for the first time in the SEC’s 85-year history, allow it to pursue the broad remedy of restitution, at least in cases against members of the securities industry.
Law continues to be one of the least diverse professions in the United States, and the challenges of creating an inclusive legal environment continue.
Michelle Bradford, a member of the firm’s White Collar Defense, Investigations & Compliance Counseling Practice, will receive a 2019 Leadership in Law Award from The Daily Record, a news source and publication that covers Maryland legal and business.