The Securities Litigation Expert Blog

New York City Bar Securities Arbitration and Mediation CLE Program

Posted by Jack Duval

May 6, 2013 2:44:41 AM

The New York City Bar Association is sponsoring a half-day program on Securities Arbitration and Mediation on June 4, 2013 from 9am to 1:15pm.  (NYCB)  Here's the schedule:

9:00 - 9:05 a.m. Introduction 

9:05 - 9:25 a.m. FINRA: Breaking News… New Rules, Proposed Rules, Large Case Pilot Project, Pre-Dispute Arbitration Agreements and the Class Action Waiver Linda D. Fienberg 

9:25 – 9:45 a.m. All Public Arbitrator Panels: Special Advocacy Tips, The Importance of Experts, & Expanded Discovery Rules Scott C. Ilgenfritz & Theodore Krebsbach 

9:45 – 10:00 a.m. Who is a Customer? Sandra D. Grannum & Joseph Peiffer 

10:00 - 10:20 a.m. Expungement, In Rem Proceedings & Joint Representation Issues Sandra D. Grannum & Joseph Peiffer 

10:20 - 10:30 a.m. Break 

10:30 - 11:00 a.m. Supervision of “Complex” Products, Non-traded REIT’s, & Leveraged/Inverse ETF’s Darya Geetter & Joseph Peiffer 

11:00 - 11:30 a.m. New Suitability Rule Scott C. Ilgenfritz, Michael Schwartzberg & James Wrona 

11:30 – 11:45 a.m. Claims by and Related to Seniors Theodore Krebsbach & Joseph Peiffer 

11:45 - 12:00 p.m. Interplay Between Arbitration Proceedings and Regulatory Proceedings Sandra D. Grannum, Joseph Peiffer & Michael Schwartzberg 

12:00 – 12:15 p.m. Conversation Between the Audience and the Panel: What do arbitrators want from advocates; The increasing complexity of arbitration

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Topics: FINRA, litigation, supervision, SEC, NYC Bar, Compliance, regulation., education

Finra Cracking Down on Unauthorized Discretion

Posted by Jack Duval

Apr 22, 2013 3:23:30 AM

Finra has disciplined 17 registered representatives for taking unauthorized discretion in client's accounts - twice the pace of such actions comparable to the same period last year, Thomson Reuters reports. (TR)

For those of you needed a refresher, Finra Rule 2510 is crystal clear, there can be no taking of discretion without prior written authorization.  (2510)  Importantly, this excludes any kind of verbal understandings as to strategies or transactions.

As my branch office supervisor at Merrill Lynch used to say, "if you make an unauthorized trade, the client has a lifetime put on it."

Compliance and supervisory personelle would be wise to reinforce Rule 2510 with their registered representatives in their continuing education efforts.

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Topics: FINRA, discretion, continuing education, Investment Advisors, litigation, Rule 2510, supervision, SEC, Compliance, education

Ernst & Young CEO says Investments are Too Complex

Posted by Jack Duval

Feb 26, 2013 3:53:00 AM

This blog post continues our expert analysis of complex investments and their regulation.

The Times-Picayune reports that E&Y CEO James Turley, speaking at Tulane University, decried the complex nature of modern investments. (TTP)

... Some of those instruments were created for good reasons, he said, to better reflect complex and abstract financial forces, but the finance industry has yet to succeed at explaining their meaning.  "It actually becomes less and less transparent because it's less understandable," Turley said during the 20th installment of Tulane's Burkenroad Institute Symposium onBusiness and Society. "There is a real disconnect going on."

See our previous coverage of complex investments here, here, and here.
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Topics: Ernst & Young, James Turley, investments, Complex Investments, Complexity, education

Big Data for Big Cities

Posted by Jack Duval

Feb 25, 2013 4:37:43 AM

The internet of things is coming to a city near you.  The New York Times had an interesting article on how real-time data of a cities traffic, water, and energy use can be used to reduce its resource consumption by up to 50 percent. (NYT)

NYU has started a program called the Center for Urban Science and Progress to study the "science of cities".  This is just one more example of how New York is becoming of of the dominate technology hubs on the planet.

The initiative at N.Y.U. is part of a broader trend: the global drive to apply modern sensor, computing and data-sifting technologies to urban environments, in what has become known as “smart city” technology. The goals are big gains in efficiency and quality of life by using digital technology to better manage traffic and curb the consumption of water and electricity, for example. By some estimates, water and electricity use can be cut by 30 to 50 percent over the course of a decade.

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Topics: big data, Statistics, NYU, Complexity, Predictive Analytics, NYT, education

Finra Issues Investor Alert on Duration Risk

Posted by Jack Duval

Feb 15, 2013 4:26:47 AM

Finra has issued an Investor Alert explaining duration risk.  (Finra)  For those of you unfamiliar with duration, here's what you need to know from the Investor Alert:

The higher a bond’s duration, the greater its sensitivity to interest rates changes. This means fluctuations in price, whether positive or negative, will be more pronounced. If you hold a bond to maturity, you can expect to receive the par (or face) value of the bond when your principal is repaid, unless the company goes bankrupt or otherwise fails to pay. If you sell before maturity, the price you receive will be affected by the prevailing interest rates and duration. For instance, if interest rates were to rise by two percent from today’s low levels, a medium investment grade corporate bond (BBB, Baa rated or similar) with a duration of 8.4 (10-year maturity, 3.5 percent coupon) could lose 15 percent of its market value. A similar investment grade bond with a duration of 14.5 (30-year maturity, 4.5 percent coupon) might experience a loss in value of 26 percent.1 The higher level of loss for the longer-term bond happens because its duration number is higher, making it react more dramatically to interest rate changes. (Emphasis added)

There is no doubt that from current levels, a rise in interest rates has the potential to cause widespread losses, especially in lower-quality issues.  Hat tip to Finra for trying to get ahead of it with their investor education efforts.  Compliance and supervisory personal should take note as well.

See our previous coverage of interest rate risk here, here, and here.

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Topics: FINRA, duration, investments, risk, fixed income, Compliance, education

Finra Annual Conference May 20-22 | Washington, D.C.

Posted by Jack Duval

Jan 13, 2013 5:16:16 AM

Finra has announced it's annual conference topics.  (Finra)  FYI, if you can't make it down to Washington, you can live stream it for $700 (for non-members).  (I have used the Finra streaming software before and it works well.)

Topics will include:

  • Anti-Money Laundering

  • Branch Office Inspections

  • Business Continuity Planning

  • Consolidated Audit Trail (CAT) and Large Trader Reporting

  • Cyber Security

  • Enforcement Developments

  • Ethics for Securities Attorneys

  • Examinations

  • Financial and Operational Considerations

  • Fraud Prevention

  • JOBS Act

  • Municipal Securities

  • Outside Business Activities

  • Private Placements

  • Retail Sales of Complex Products

  • Small Firm Compliance Practices

  • Social Media and Communications With the Public

  • Suitability

  • Supervision

  • Technology Priorities for Broker-Dealers


Detailed session descriptions can be found here.



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Topics: FINRA, streaming, private placements, litigation, arbitration, suitability, complex products, investments, supervision, Annual Meeting, Complex Investments, Compliance, Dodd-Frank Act, regulation., Complexity, education

A.O. Hirschman Dead at 97

Posted by Jack Duval

Dec 24, 2012 3:07:29 AM

The New York Times has an obituary on economist A.O. Hirschman. (NYT)  Hirschman's Exit, Voice, and Loyalty was a classic that I read in graduate school.  The book dwelled at the intersection of politics and economics.

Hirschman's work is an anachronism now, a relic of an age when economists still asked big questions and answered them with words instead of numbers.

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Topics: economics, A.O. Hirschman, New York Times, economists, education

Predictive Analytics for Banking Conference

Posted by Jack Duval

Dec 6, 2012 8:45:22 AM

I'm a little late on this, but IE is sponsoring a predictive analytics conference for the banking industry, it runs two days and starts today.  (IE)  Many heavy hitters from the big banks.  I can't go, but it looks very interesting.

You can also get their on-demand content here.

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Topics: IE, Statistics, Data Analysis, finance, banking, risk, Compliance, Predictive Analytics, education

New York City Bar CLE

Posted by Jack Duval

Dec 4, 2012 2:05:05 AM

For my friends in the New York City area, the First Annual Securities Litigation and Enforcement Institute is having a full day CLE event on Tuesday, December 11, from 9am to 5pm.  (CLE)

For the full schedule, see this.

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Topics: FINRA, Securities Litigation and Enforcement Institute, New York City, litigation, SEC, Compliance, regulation., education, CLE

PwC Open University

Posted by Jack Duval

Oct 24, 2012 2:21:09 AM

PwC has some interesting looking material on its Open University Platform. (PwC)  It's all free and most looks to be downloadable in friendly formats.  Get some insights as well as CPE credits.

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Topics: PwC, Open University, CPE Credit, education

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