SEC Brief in SEC v. Kramer August 19, 2011 The SEC submitted a brief to the Eleventh Circuit Court of Appeals to appeal a lower court decision relating to the distinction between a "finder" and a "broker" for the purposes of the registration requirements under the Exchange Act. The case involves a defendant who, among other things, solicited sales of stock in a company, pursuant to a "cooperative" agreement to share business and split fees with a registered broker. The registered broker sold shares in the company, for which the unregistered defendant received compensation. The lower court took

FINRA News Release September 7, 2011 FINRA announced fines against five broker-dealers for understating the amount of total commissions it charged customers and for mischaracterizing a portion of commission charges as fees for "handling services." The cases were the result of a targeted review by FINRA that found that firms were routinely charging customers for handling services that far exceeded the actual cost of such services. The disciplinary action is significant in that it involves firms overcharging in small amounts (that can obviously add up) on agency commissions, as opposed to a more

RN 11-40 August 29, 2011 The SEC granted approval to amendments to the FINRA rules that clarify, for purposes of the exception for trade reporting for transactions that are part of a distribution, the term "distribution" has the same meaning as under Regulation M. In addition, the rule change clarifies that transfers of equities for the purpose of redeeming instruments such as ADRs or ETFs are excluded from trade reporting requirements. Firms that rely on the transaction exception for securities part of an "unregistered secondary distribution" are required to give notice to FINRA providing

76 FR XXX (SEC Release Nos. 33-9257 / 34-65262 / IA-3271 / IC-29781) September 6, 2011 The SEC invited public comment on the development of a plan to retrospectively review its regulations. The comment request is a result of a recent Executive Order requiring "independent" agencies to reassess certain of their regulations. The SEC's release is also likely a reflection of increased attention of the significance of the regulators performing, or failing to perform, cost-benefit analyses on proposed regulations. On the other hand, it is not at clear that the SEC has the resources to conduct a

76 FR XXX (SEC Release No. 34-65263) (SR-MSRB-2011-09) September 6, 2011 The SEC published for comment a proposed interpretive notice of the MSRB concerning the application of MSRB Rule G-17 to underwriters of municipal securities. The MSRB stated that the change was a result of Dodd-Frank's direction that the MSRB explicitly protect municipal entities. The proposed guidance would generally apply a number of conduct rules to municipal underwriters in their communications with issuers. Cross References MSRB Rule G-17