Friday, July 21, 2017

Federal Regulatory Agencies Announce Coordination of Reviews for Certain Foreign Funds Under Volcker Rule

Five federal financial regulatory agencies today announced that they are coordinating their respective reviews of the treatment of certain foreign funds under section 619 of the Dodd-Frank Act, commonly known as the Volcker Rule, and the agencies' implementing regulations.

These foreign funds are investment funds organized and offered outside of the United States that are excluded from the definition of "covered fund" under the agencies' implementing regulations (foreign excluded funds).  Section 619, and the implementing regulations, generally do not apply to investments in, or sponsorship of, these foreign excluded funds by a foreign banking entity.

However, complexities in the statute and the implementing regulations may result in certain foreign excluded funds becoming subject to regulation under section 619 because of governance arrangements with or investments by a foreign bank. As a result, a number of foreign banking entities, foreign government officials, and other market participants have expressed concern about possible unintended consequences and extraterritorial impact.

The staff of the agencies are considering ways in which the implementing regulations may be amended, or other appropriate action may be taken. It may also be the case that congressional action is necessary to fully address the issue. To aid full consideration, the federal banking regulators, which generally oversee foreign banks, announced that they would not take action under section 619 for qualifying foreign excluded funds, subject to certain conditions, for a period of one year.

Section 619 generally prohibits insured depository institutions and any company affiliated with an insured depository institution from engaging in proprietary trading and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with a covered fund. These prohibitions are subject to a number of statutory exemptions, restrictions, and definitions.

Final regulations implementing section 619 were previously issued by five agencies – the Federal Reserve Board, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission. 

Today's announcement does not otherwise modify the rules implementing section 619 and is limited to certain foreign excluded funds that may be subject to the Volcker Rule and implementing regulations due to their relationships with or investments by foreign banking entities. 

Media Contacts:

Federal Reserve                     Eric Kollig                                202-452-2955

CFTC                                      Erica Elliott Richardson           202-418-5382

FDIC                                       David Barr                               202-898-6992

OCC                                        Stephanie Collins                    202-649-6870

SEC                                        Office of Public Affairs             202-551-4120

SEC Press Release

--- If you need help with a securities litigation, arbitration or litigation issue, email Mark Astarita or call 212-509-6544 to speak to a securities lawyer.

Thursday, July 20, 2017

Record SEC Award Expected for JPMorgan Whistleblowers

The SEC is expected to present the largest whistleblower award in its history – possibly $70.6 million or more to be shared by two whistleblowers in a case involving a former adviser at JPMorgan Chase – according to a SEC letter released by one of the whistleblowers.

The award results from information that led to a record $307 million in regulatory fines against JPMorgan in 2015. The bank admitted it had been breaching its fiduciary duty for years by putting unwitting clients into the bank's own high-priced investments.

Record SEC award expected for JPMorgan whistleblowers | On Wall Street


Sallah Astarita & Cox, LLC represents all participants in the financial markets, including whistleblowers. For more information call Mark J. Astarita, Esq. at 212-509-6544 or contact him by email at

Wednesday, July 19, 2017

New York Barred From Appearing Before SEC

The Securities and Exchange Commission today barred a New York-based attorney from appearing or practicing before it and acting as an officer or director of a public company after finding that he made false and misleading statements in corporate filings.

The SEC’s order finds that David Lubin committed fraud while serving as a director and corporate counsel of Entertainment Art, a public company in which Lubin also was a large shareholder.  Lubin negotiated the sale of all of the outstanding stock of Entertainment Art, including both restricted and previously registered shares that were purportedly “free trading,” to an acquaintance interested in purchasing shell companies.  Absent a valid exemption, common ownership of all of the shares of a public company would require the owner to register the shares for resale to the public.  According to the SEC’s order, Lubin fraudulently misrepresented in Entertainment Art’s corporate filings that the purportedly free-trading shares had not been purchased by the acquaintance.  This left the false impression that those shares remained immediately available for public resale.  During the next two years and until he left the company, Lubin drafted and signed SEC filings that continued to lie about the true ownership of the company’s stock.

According to the SEC’s order, soon after the company was renamed Biozoom, more than 14 million shares were resold to the public in an illegal unregistered distribution for illicit proceeds of $34 million.  The SEC froze assets from the unregistered sales in 2013.

“As the SEC's order notes, Lubin drafted and signed misleading public filings and masked the true ownership and restricted nature of a significant portion of the company’s stock,” said Antonia Chion, Associate Director in the SEC’s Enforcement Division.  “Lubin’s deception led to many of these same shares being illegally resold to the general public by others a few years later.”
The U.S. Attorney’s Office for the Southern District of Florida today announced criminal charges against Lubin.

The SEC’s order finds that Lubin willfully violated Section 10(b) of the Securities Exchange Act and Rule 10b-5, imposes a cease-and-desist order and an officer-and-director bar.  The SEC’s order also prohibits Lubin from representing clients in SEC matters, including investigations, litigation, or examinations, and from advising clients about SEC filing obligations or content.  The SEC ordered a public hearing before an administrative law judge to prepare an initial decision determining what, if any, disgorgement or monetary penalties are in the public interest.

SEC Press Release

--- If you need help with a securities litigation, arbitration or litigation issue, email Mark Astarita or call 212-509-6544 to speak to a securities lawyer.

Tuesday, July 18, 2017

Not All Trial Lawyers Can Handle All Kinds Of Trials

Great article from Above The Law. Although it is directed at young attorneys deciding on a career path, it provides great advice to clients as well.

I am a trial lawyer, a litigator, and have been at it for over 30 years. While I have represented clients at trial, in state and federal courts, most of my trial experience is in securities arbitrations, and virtually all of my work is in the securities area.

The point is that while I am an experienced trial attorney, my expertise and experience is limited to securities matters - SEC and FINRA enforcement proceedings, and arbitrations between customers and brokers, and arbitrations between brokers and firms. So, while I represent brokers in employment disputes, I am by no means a labor lawyer and do not represent employees outside of the securities industry. For those cases, I refer potential clients to true labor lawyers.

And the reverse is true. My labor and employment colleagues do not represent brokers in disputes with their securities firms. There is just too much that they need to learn about the securities industry in order to provide effective representation. I send the business employee disputes to them, they send the securities employee disputes to me.

Think about that when you are hiring an attorney. For securities attorneys, check their website, search FINRA's arbitration award database,  FINRA's enforcement proceedings, the SEC administrative proceeding database. You can also search the federal court database at (but it is court specific), and depending on the state, check your state court system's database.

Keep in mind that your attorney need not be licensed in your state in order to represent you in an arbitration or enforcement proceeding (I have represented clients in over 20 different states in such matters) but this research will give you some insight into your potential attorney's experience.

And most importantly - ask him or her about their experience, what type of cases they have handled in the past, and think hard about retaining a divorce attorney for your customer dispute, or a union labor attorney for your promissory not case.

From the article:

"[S]omeone who specializes in personal injury probably does a better job of knowing what the juries want in those cases—a more raw sense of justice, theatrics, I’m not sure—than I would as someone who has not yet tried such a case. And as experienced as I’d like to think I am, I’d be a fish out of water in landlord-tenant court or a tax court, and I don’t simply mean not knowing the rules, I mean handling myself on my feet. There are differences."

Not All Trial Lawyers Can Handle All Kinds Of Trials | Above the Law

Mark J. Astarita is a partner in the securities law firm of Sallah Astarita & Cox. He represents brokerage firms, financial advisers, and investors in securities enforcement, litigation and arbitration matters across the country. Have a question? Email him at

Wednesday, July 12, 2017

RIAs Continue to Grow

Increasingly financial advisors are realizing the benefits to become an investment advisor rather than a traditional registered representative. We have discussed the benefits on multiple occasions, and while the RIA model is not for everyone, there are significant benefits to the RIA model.

This is partially demonstrated by the growth of RIAs, as demonstrated by Financial Advisor Magazine's 2017 RIA Survey  & Ranking, and the accompanying commentary.

RIA Survey & Ranking 2017

Tuesday, July 11, 2017

Bored Traders on Tinder Are a Symptom of Wall Street Revenue Dip

Bored Traders on Tinder Are a Symptom of Wall Street Revenue Dip

"One bond trader says he’s been slipping out early to watch his kids play sports. A fund manager says his office just staged a golf retreat. A trading supervisor at another bank confides he’s swiping through a lot of profiles on Tinder, the dating app. Welcome back, Wall Street, to the doldrums."

Sallah Astarita & Cox is a national securities law firm representing investors and brokers across the country in litigation, arbitration, and regulatory matters. Call 212-509-6544 for more information

Thursday, July 6, 2017

Should I ... Report elder abuse? | On Wall Street

Elder abuse is an increasingly common problem and needs to be reported.

"Older Americans are so often victims of financial abuse that the National Council on Aging estimates it costs the elderly $36.5 billion annually."

Should I ... Report elder abuse? | On Wall Street: