The legal landscape underpinning digital asset transactions is continually evolving, with recent developments providing some clarity on a largely unregulated sector. A case in point are the rulings by Judges Torres and Rakoff in the Southern District of New York in July 2023, centering on whether digital asset sales via trading platforms fall under the…
On September 5, 2023, the Securities and Exchange Commission (SEC) announced that it had charged five registered investment advisers (RIAs) with violations of the Investment Advisers Act of 1940, including Rule 206(4)-2, better known as the “Custody Rule”. This rule is in place to ensure the safety of client funds and securities, reducing the risk…
The U.S. Securities and Exchange Commission (SEC) continues to assertively enforce its Whistleblower Program under the Biden Administration. Previously, the SEC has taken actions against agreements and procedures employed by companies that it argues limit employees’ access to the SEC. More recently, on September 8, 2023, the SEC announced an Order to impose a fine…
In the last couple of years, a shift has been observed in the strategy of multiple real estate investment trusts (REITs), as shown by filings made with the Securities and Exchange Commission. They have been increasingly adopting a Delaware Statutory Trust (DST) program. This tends to include a conversion feature, in which initial investors in…
The Ontario Securities Commission (OSC) has recently available its Annual Summary Report for Dealers, Advisers, and Investment Fund Managers for the 2022-2023 fiscal year. The report was drafted by the Compliance and Registrant Regulation Branch and provides vital insights into the financial sector’s compliance measures and regulations, which holds significant implications for legal professionals across…
In an unexpected turn of events, the U.S. Court of Appeals for the D.C. Circuit issued a significant ruling against the Securities and Exchange Commission (SEC) on August 29, 2023. The court held that the SEC had acted “arbitrarily and capriciously” when it disapproved the listing of Grayscale Investments, LLC’s proposed spot bitcoin exchange-traded product…
The US Securities and Exchange Commission (SEC) recently issued a Risk Alert which provides insight into the examination process and criteria used in selecting investment advisers for an assessment. This is particularly relevant for legal professionals working within investment advisory firms. As articulated by Seward & Kissel LLP, the staff of the SEC’s Division of…
The U.S. Securities and Exchange Commission (SEC) is currently involved in new litigation following the recent introduction of the Private Fund Adviser (PFA) Rule. The rule aims to strengthen transparency and competition within the private funds industry, which is responsible for managing an estimated $20 trillion in assets. The PFA Rule has attracted both support…
The U.S. Securities and Exchange Commission (SEC), in quick succession, has made public enforcements against two non-fungible token (NFT) ventures for purportedly violating securities laws. According to JDSupra, these recent actions suggest an intensification in the regulatory scrutiny of NFT projects. The initial enforcement was declared against Impact Theory on August 28, 2023, while the…
In a noteworthy development in US financial regulation, the Securities and Exchange Commission (SEC) has adopted a scaled-back version of the Private Fund Rules. This comes as part 2 of the analysis presented by Paul Hastings’ Investment Funds and Private Capital team. Their detailed review can be found here. This recent adoption of the modified…
With the ever-changing landscape of investment advisors, the Securities and Exchange Commission (SEC) has taken measures to keep its risk-based approach harmonized with market shifts. On September 6, the SEC issued a risk alert, explicating the elements factored into its risk-based approach when selecting SEC-registered investment advisers (advisers) for examination. In an effort to keep…
In recent times, the Securities and Exchange Commission (SEC) has become a determining factor in the operations of registered investment advisors. Regardless of the size or nature of operations, no investment advisor is immune to the scrutinous lens of an SEC examination. This event is not merely a possibility; it is a certain inevitability. Against…
On September 7, 2023, the International Organisation of Securities Commissions (IOSCO) initiated a consultation on the policy proposals aimed at addressing market integrity and investor protection concerns in the realm of decentralized finance (DeFi). According to an update from Shearman & Sterling LLP, IOSCO is aiming to finalize these recommendations before the end of 2023…
Among the ever-evolving complexities of the digital era, predictive data analytics (PDA) and similar technologies have emerged as powerful tools in the hands of broker dealers and investment advisors. However, along with the promise of greater efficiency and insights, these tools have brought their own unique challenges, the foremost being potential conflicts of interest. The…
In a reaffirming decision by the United States Court of Appeals for the Second Circuit, commercial lenders are likely to see a shift in their operating landscapes. The recent judgement in Kirschner v. JP Morgan Chase Bank, N.A., ruled that a syndicated term loan is not considered a security. This affirms a precedent set by…
In an important development within the legal framework of the United Arab Emirates (UAE), the Securities and Commodities Authority (SCA) of the UAE has recently modified the rules controlling the distribution of foreign funds within the country. This revision has resulted in substantial amendments, which may significantly adjust the operation and approach of both foreign…
On August 23, 2023, the Securities and Exchange Commission (SEC) made significant alterations to the rules and amendments under the Investment Advisers Act of 1940. These new rules, while less onerous as initially proposed, include substantial adaptations and additions that are certain to have far-reaching implications for legal professionals in corporate law firms and major…
In the ever-evolving world of corporate digital environments, cybersecurity incidents have become a major focal point for companies and their legal departments. A pertinent question in this realm is “What Makes an Incident ‘Material’?” in terms of Securities and Exchange Commission (SEC) requirements for disclosure on Form 8-K. On July 26, 2023, the SEC adopted…
On September 6, 2023, the staff of the US Securities and Exchange Commission’s (the “SEC”) Division of Examinations (the “Division”) issued a risk alert providing insights into how it chooses investment advisers for examination and the range of risk areas it prioritizes. The comprehensive details of which can be found on this report. The Division…
Wilson Sonsini Goodrich & Rosati has released the 2023 Mid-Year Technology and Life Sciences PIPE and RDO Report. Offering insight into venture capital and public market investments in U.S.-based tech and life sciences companies, the report presents a comprehensive analysis of 87 private investments in public equity (PIPEs) and registered direct offerings (RDOs) during the…
In the realm of global legal developments, the world of anti-corruption law is rapidly evolving, providing numerous notable incidents and changes in this past month alone. This article offers an insight into the top ten international anti-corruption developments for August 2023. Undoubtedly, one of the most significant updates is related to a multinational company and…
On July 26, 2023, in a pivotal 3-2 vote, the Securities and Exchange Commission (SEC) adopted new regulations. Known as the “Final Rules,” these will necessitate public companies to disclose information about cybersecurity incidents. Additionally, they are also required to divulge facts about their management, strategy, and governance in relation to cybersecurity. This development will…
In a recent determination, the Delaware Court has cast ambiguity over the application of the “Bump-Up” Exclusion clause in relation to mergers and acquisitions. A standing feature of directors’ and officers’ (D&O) liability insurance policies, this clause is garnering attention for its increasing relevance in securities litigation that often follows high-profile business mergers and acquisitions….
In a significant legal development, the U.S. Court of Appeals for the Second Circuit has issued its ruling on the highly anticipated case, Marc S. Kirschner v. JP Morgan Chase Bank, N.A., et al. This decision was announced on August 24, 2023, bringing a complex legal argument to a critical juncture. This case revolves around…
The U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing on September 12, 2023, focusing on the oversight of the U.S. Securities and Exchange Commission (SEC). The hearing indicates an intensified focus in Washington DC on financial regulations, with particular attention to the operations and rules of the SEC. The Senate Committee…