The Financial Industry Regulatory Authority (“FINRA”) recently released its 2018 Regulatory and Examination Priorities Letter (the “Priorities Letter”) ( here ). here .=">here</a>."> The Priorities Letter identifies the areas that FINRA intends to focus on in the coming year. “The coming year will bring both continuity and change in FINRA’s programs,” FINRA President and CEO, Robert Cook (“Cook”), wrote in a note accompanying the letter. FINRA’S 2018 Priorities at a Glance T

The Public Company Accounting Oversight Board (“PCAOB” or the “Board”) is a nonprofit corporation established by Congress to oversee the audits of public companies. The Board was created as part of the Sarbanes-Oxley Act of 2002 in response to the accounting scandals at Enron Corp. and WorldCom Inc. – scandals that cost investors billions of dollars. Prior to the creation of the Board, the profession was self-regulated. The PCAOB protects investors by promoting informative,

Last month, the Second Circuit reinstated a securities class action against Alibaba Group Holding Ltd. (“Alibaba” or the “Company”) and four of its senior executives for making materially false and misleading statements and omissions in connection with the Company’s September 2014 initial public offering (“IPO”). In June 2016, Chief Judge Colleen McMahon of the U.S. District Court for the Southern District of New York dismissed the complaint because the plaintiffs failed to s

Under Section 702 of New York’s Limited Liability Company Law (“LLCL”), a court sitting in the judicial district in which the office of the company is located may dissolve the company “whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement.” LLCL § 702. (This Blog addressed Section 702 here and here .) To successfully petition for the dissolution of a limited liability company under LLCL § 70

Ponzi schemes remain a familiar and unfortunate risk for investors. Because Ponzi schemes purport to offer high returns with little or no risk, and rely on inflated credentials of a financial professional, investors are attracted to the investment products these scammers offer. Often, Ponzi schemes are perpetrated on specific groups of people sharing common interests, such as a church or charitable group. (Fraudulent sales practices that target specific organizations or group

Should Your Business Contracts Contain Mandatory Arbitration Clauses? Mandatory arbitration clauses have increased in popularity in recent years and are now part of most business contracts. While arbitration clauses are not ideal for all situations, this method of dispute resolution can provide benefits to both businesses and customers alike. What is an Arbitration Clause? Arbitration is an alternative form of dispute resolution where the parties voluntarily agree that a neu

A recent blog post entitled: “ Appellate Division, Second Department Tells Foreclosing Residential Lender to ‘SHOW ME THE EVIDENCE ,’” cautioned foreclosing mortgagees that evidence in admissible form must be submitted to the court to demonstrate compliance with the many statutory provisions that must be followed to ensure a successful foreclosure action. The Second Department in U.S. Bank National Association v. Brody , decided on December 20, 2017, reiterates that foreclo

Since the late 1970s, federal employees have enjoyed protection from retaliatory acts in response to the reporting of illegal or other wrongful conduct by their employers. Such protections were provided in the Civil Service Reform Act of 1978. Since that time, Congress has expanded the protections for federal employees in the Whistleblower Protection Act of 1989 (“WPA”) and the Whistleblower Protection Enhancement Act of 2012 (“WPEA”). Whistleblower Protection Act Of 1989 T

J.P. Morgan Securities, LLC ("J.P. Morgan") was recently fined $1.25 million by the Financial Industry Regulatory Authority ("FINRA") for how the securities firm handled criminal background checks. In particular, J.P. Morgan failed to conduct timely or adequate background checks on approximately 95 percent of its non-registered personnel, a total of about 8,600 employees. As noted by FINRA in the announcement of the settlement ( here ), under the federal securities laws, br

According to a report issued jointly by the New York University Pollack Center for Law & Business and Cornerstone Research, the Securities and Exchange Commission (“SEC” or “Commission”) filed 33% fewer enforcement actions against public companies and their subsidiaries in fiscal year 2017 than in fiscal year 2016. The report ( here ), SEC Enforcement Activity: Public Companies and Subsidiaries, Fiscal Year 2017 Update (the “Report”), analyzes data from the Securities Enforc

Certain provisions of New York’s Labor Law require that construction workers be provided with a safe work environment. Contractors and owners can be held strictly liable under certain circumstances if a construction worker is injured while working on a construction project. Such strict liability may apply to homeowners if they become too helpful or involved with construction and, therefore, render inapplicable the exceptions inserted into the Labor Law for their protection.

On October 12, 2017, the House Financial Services Committee approved legislation that would provide legal protection for financial advisers who report the financial abuse and exploitation of senior Americans to authorities. The bill, which was unanimously approved by the committee, will go to the House floor for a vote. Like the current bill, the previous version of the Safe Act received broad bipartisan support during the last Congress. Congressman Bruce Poliquin (R-ME) and

Article 3-A of New York’s Lien Law establishes a system of trusts to ensure that certain individuals or entities that contributed services, labor and/or materials to a construction project for the improvement of real property are paid for their efforts.

This Blog has previously written about the financial exploitation of America’s seniors. ( Here , here , here and here .) As noted in these prior posts, unscrupulous investment professionals (such as, stockbrokers, financial advisors and insurance brokers) often exploit the fact that many elder and disabled investors are not market savvy and financially sophisticated or are trusting of those in a position of knowledge and authority. They prey on the fact that senior and vulne

In the wake of the hack of personal consumer information from Equifax Inc.’s computers, congressional lawmakers have asked the Securities and Exchange Commission ("SEC") to investigate whether company executives violated insider trading laws. The cyber breach involved the theft of 143 million Americans’ personal data --including Social Security numbers, driver’s license records and birth dates. Equifax is one of the main credit bureaus that compiles data to form credit histor

On September 7, 2017, the Securities and Exchange Commission ("SEC") announced that State Street Corp. agreed to pay more than $35 million to settle charges that it fraudulently charged secret markups for transition management services and separately omitted material information about the operation of its platform for trading U.S. Treasury securities. Hidden Transition Management Fees The SEC charged State Street with defrauding six institutional investors by charging hidd

On September 5, 2017, Judge Lorna G. Schofield of the United States District Court for the Southern District of New York certified a class of Deutsche Bank employees who had filed an action under the Employee Retirement Income Security Act (“ERISA”), alleging self-dealing in the company’s retirement plan – the Deutsche Bank Matched Savings Plan (the “Plan”). In particular, the Plaintiffs alleged that Deutsche Bank and the other defendants violated their fiduciary duties by l

In prior posts, this Blog has written about the financial exploitation and abuse of vulnerable adults. ( Here , here and here .) Late last month, CNBC ran a story about this growing and disturbing problem. ( Here .) Financial exploitation of the elderly and vulnerable is a common occurrence. According to the U.S. Department of Justice, financial exploitation of senior adults is one of the most frequently reported forms of elder abuse. Indeed, a recent survey from the North

Implicit in every contract is a covenant of good faith and fair dealing. New York Univ. v. Continental Ins. Co. , 87 N.Y.2d 308, 318 (1995). “The covenant is breached where one party to a contract seeks to prevent its performance by, or to withhold its benefits from, the other.” Michaan v. Gazebo Hort., Inc. , 117 A.D.3d 692, 693 (2d Dept. 2014) (citation and quotation omitted). “While the duties of good faith and fair dealing do not imply obligations inconsistent with other

Previously, this Blog considered the rules for judicial dissolution of a limited liability company (“LLC”). Here . A brief reminder follows below. Under Section 702 of New York’s Limited Liability Company Law (“LLCL”), a court sitting in the judicial district in which the office of the company is located may dissolve the company “whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement.” LLCL §