For generations, investors had clear choices when seeking assistance in investing their money. Investment advisers provided financial advice, either by exercising discretionary trading authority or providing financial planning, in exchange for a fee, typically based on the asset value of the account. Brokerdealers provided execution services for clients who wished to trade, occasionally made recommendations to customers on which they could choose to act or not act, and were compensated by commissions generated on transactions in the account. Investment advisers were regulated by the Investment Advisers Act of 1940 and had clear fiduciary duties. Brokers under the Financial Industry Regulatory Authority’s (“FINRA”) regulatory scheme did not have generalized fiduciary duties to their customers, but when making recommendations to customers, they had to act “fairly” and have a “reasonable basis” for making such recommendations.
"This is a case first impression and one of signal importance in our administration of the Federal securities acts." With those words just over fifty years ago in Cady, Roberts, a Securities and Exchange Commission ("SEC") adminitrative proceeding, Chariman William L. Cary began the first insider trading decision ever issued under the federal securities laws.
Published in Of Counsel, March 2013, Wolters Kluwer - Murphy & McGonigle is recognized as successfully competing against mega-firms in the Securities Law arena.
SIFMA Compliance Legal Society, 2013 Charlotte Regional Conference, Regulatory Update
Over the past few years, the US government has taken an expansive view of who qualifies as a “Foreign Official” under the FCPA. A recent DOJ advisory opinion took the position that a member of a royal family did not qualify as a Foreign Official for FCPA purposes, leading to speculation that the government had relaxed its standards of who qualifies under the term. However, as the new FCPA Guidance demonstrates, companies should not assume that the DOJ or the SEC have narrowed their view.