The Supreme Court recently granted a writ of certiorari to address whether the Securities and Exchange Commission (SEC) may obtain disgorgement in civil injunctive actions filed in the federal courts. How the court resolves this question may have a significant impact not only on the SEC's enforcement programme, but also on a wide array of other federal regulators that rely on courts invoking similar equitable authority to fashion remedies.
The Financial Industry Regulatory Authority recently censured and fined a Florida-based broker-dealer, including for failing to reasonably supervise sales of complex securities such as structured products and leveraged, inverse and inverse-leveraged exchange-traded funds. This case illustrates the need for broker-dealers to establish and enforce proper surveillance systems and written procedures to ensure the suitability of their sale recommendations.
The North American Securities Administrators Association recently issued a report that provided a warning as to the risks of leveraged or inverse exchange-traded funds. The report urges broker-dealers to tailor their supervisory procedures if they allow exchange-traded fund (ETF) transactions in these products. Among other things, the report concludes that broker-dealers should carefully consider whether to permit purchases of leveraged or inverse ETFs in retail customer accounts.
The Securities and Exchange Commission (SEC) recently proposed amendments to the description of business, legal proceeding and risk factor disclosures that are required pursuant to Regulation S-K. While the SEC's concept release dealt with a wide variety of topics, these latest proposals represent a more measured approach towards modernising and simplifying such disclosure requirements.
Blockstack Token LLC, a wholly owned subsidiary of Delaware public benefit corporation Blockstack PBC, recently became the first company to have an offering of digital assets qualified by the Securities and Exchange Commission under Regulation A. Although Blockstack's is the first Regulation A token offering to be qualified, it demonstrates the potential for other blockchain-based companies to use Regulation A as a viable capital-raising tool.